Global Oil Prices Hit $110pb as EU Unveils Fresh Sanctions Against Russia

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………W/Bank Sees High Energy Prices Years After Russia’s War In Ukraine
……..EU to ban all shipping, insurance and financing servers to transport of Russian oil

Global oil prices responded sharply yesterday, hitting $110 per barrel before dusk as details on the European Union’s plans to ban Russia oil unveiled and found way into the market.

Up 4.75% on the day as of 1:53 p.m. EST, just under $110 per barrel, oil prices are responding to additional details on European Union plans to embargo Russian oil, including through sanctions on insurance companies.

Reuters said in a report that in one month, the European Commission proposes to ban all shipping, brokerage, insurance and financing servers related to the import and transport of Russian oil, quoting an unnamed EU source.

The report said there is a global element to the proposed ban related to export of Russian oil in order to make it more difficult for Russia to seek out alternative buyers.

However, shipping and financing, specifically, the proposed ban would only be put in place for European Union companies, Reuters said.

Responding, Bloomberg said the proposed complete ban on Russia oil represents a severe measure, as some 95% of the world’s taker liability coverage goes through the London-based International Group of P&I Clubs.

The market appears to be assessing the EU moves as far more serious than previous talk, with Bloomberg also noting the Iranian precedent, when the U.S. and the EU managed to confound Iran’s oil exports by targeting insurance. 

Oil is also responding to rumblings from a meeting earlier yesterday of the OPEC+ and the Joint Technical Committee (JTC), which signaled the likelihood that no further oil output increases beyond the previously discussed 423,000bdp commitment for June would be forthcoming.

These issues are now outweighing fears of demand destruction coming out of China, where COVID lockdowns continue, with no concrete indications of easing in the immediate term.

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