Oil prices rebound amid looming prospect of EU sanctions
Oil prices have surged amid reports the European Union (EU) could phase in a ban on Russian oil imports.
Brent Crude prices have risen 2.68 per cent to $111.70 per barrel, while WTI Crude has climbed 2.59 per cent to $107 per barrel.
Contracts on both major benchmarks recorded their first weekly gain in April.
Prices have been highly volatile this year – spiking to a 14-year peak of $139 per barrel last month before dropping back below the $100 milestone last week after IEA and US pledged to flood the market with 240m barrels.
Markets are again rebounding, with media reports the EU is weighing up a gradual ban of Russian oil to give Germany and other countries time to arrange alternative suppliers.
According to The New York Times, the trading bloc is set to unveil a similar phased approach to the ban on Russian coal, which takes effect in mid-August.
The European Commission is drafting up plans that will force buyers to seek alternative sources.
Although the EU has imposed five rounds of increasingly severe financial sanctions on Russia over past two months, the bloc has been split over the prospect of targeting Kremlin-backed oil and gas.
It relies on Russia for around a third of its oil needs and 40 per cent of its natural gas – and has spent over €30bn on Russian fossil fuels since the country invaded Ukraine.
The IEA warned yesterday that roughly 3m barrels per day of Russian oil could be shut in from May onwards due to already imposed sanctions and buyers voluntarily shunning Russian cargoes
Meanwhile, it is unclear whether Western countries will cede to newly decreed Russian laws demanding rouble payments for energy supplies.