Oil Prices Jump on EU Proposal to Phase Out Russian Imports

Oil prices were up on EU plans to wean itself off Russian supply.

Pichit Boonhuad/Dreamstime.com

Crude prices increased Wednesday as the European Union announced a plan to do without imports from Russia. EU Commission President Ursula von der Leyen presented lawmakers from the 27-member bloc with a proposal to phase out the supply of crude from Russia within six months and refined products by the end of the year. The price of Brent crude, the international standard, climbed 3.4% to £108.51 a barrel.

West Texas Intermediate, the U.S. benchmark, was up 3.5% to £106.05. The ban on Russian crude, which follows plans to eliminate coal and natural gas imports that make up a significant proportion of the EU’s energy mix, is adding to global concerns that supply is running short. The American Petroleum Institute reported that fuel stocks fell more than expected last week.

The Organization of the Petroleum Exporting Countries (OPEC) meets this week to discuss the possibility of trying to raise output further. Oil prices had slumped on Tuesday on concern that wider Covid-19 lockdowns in China would reduce consumption in the world’s biggest oil importer. The Federal Reserve is also expected to increase its benchmark interest rate by a half point on Wednesday as it tries to cool inflation running at 40-year highs.

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