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Oil Prices Spike after EU Leaders Agree to Ban Russian Crude Import By 90%

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Oil prices have risen after EU leaders reached a consensus on Monday to ban 90% of Russian crude by the end of the year. 

During Asia hours on Tuesday, U.S. crude futures for July were up by 3.19% to $118.69, while Brent crude futures rose 1.52% to $123.52. The highest was U.S. crude rising to $119.42 per barrel, a 12-week high, according to Refinitiv data. In contracts traded for August, WTI crude rose 3.21% to $115.893, and Brent jumped 1.63% to $119.53 per barrel.

The agreement by the EU leaders settles a deadlock after Hungary had held up negotiations. Hungary is a major consumer of Russian oil and its leader Viktor Orban, has been on friendly terms with Russia’s President Vladimir Putin.

Charles Michel, president of the European Council, said the ban would first hit 75% of Russian oil imports, and 90% of the Russian oil imports in Europe will be banned by the end of the year.

This oil ban is part of the European Union’s sixth sanctions on Russia since it launched its invasion of Ukraine.

According to a statement from the European Council, the sanction will cover crude oil and other petroleum products delivered from Russia into Member States, with a temporary exception for crude oil transported through pipelines. The council added that emergency measures will be introduced to ensure security of supply in the event of sudden interruptions of supply. 

The temporary exceptions for the remaining Russian oil not banned were granted to allow Hungary, Slovakia, and the Cech Republic access to oil that they cannot easily replace. 

An estimated 36% of the EU’s oil imports come from Russia, a world power that plays a major role in global markets.

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