OIL RISES ON EU’S IMPORT PLANS

OIL PRICES jumped yesterday as the EU, the world’s largest trading bloc, spelled out plans to phase out imports of Russian oil, which offset worries about demand in top crude importer China.

Brent crude futures gained $3.92, or 3.7 percent, to $108.89 (R1 734) a barrel by 5.02pm. West Texas Intermediate crude futures increased $4.02, or 3.9 percent, to $106.32 a barrel.

Europe imports some 3.5 million barrels of Russian oil and oil products daily, and also depends on Moscow’s petrol supplies.

European Commission president Ursula von der Leyen yesterday proposed a phased oil embargo on Russia over its war in Ukraine, as well as sanctioning Russia’s top bank.

The Commission’s measures included phasing out supplies of Russian crude within six months and refined products by end-2022, von der Leyen said. She also pledged to minimise the impact on European economies.

Hungary and Slovakia, however, would be able to continue buying Russian crude oil until the end of 2023 under existing contracts, an EU source told Reuters yesterday.

“Russian oil is now ‘bad oil’,” SEB chief commodities analyst Bjarne Schieldrop said.

“This energy war of ‘good oil’ versus ‘bad oil’ has just started,” he added.

In the US, crude stocks rose modestly last week, according to the US Energy Information Administration. Stocks were up 1.2 million barrels as the US released more barrels from strategic reserves.

“The Biden Administration’s efforts to push crude onto the international market appear to be working as persistently solid SPR releases are resulting in ongoing robust crude exports,” said Matt Smith, lead oil analyst at Kpler.

Fuel stocks fell, in part due to stronger exports of products since Russia’s invasion as buyers have sought other sources.