World Oil Prices Continue Upward Trend Following The European Union Embargo On Russia

The tanker docks at the oil refinery, Bayonne, New Jersey, USA. (photo: doc. ANTARA) .

JAKARTA – The impact of the ban on trade in crude oil from Russia is starting to be felt. Oil prices edged up in early Asian trade on Thursday morning, May 5 extending gains from the previous session. This comes after the European Union proposed new sanctions against Russia that include an embargo on crude oil within six months.

Brent crude futures were up 22 cents, to trade at 110.36 dollars a barrel at 0002 GMT. West Texas Intermediate (WTI) crude futures rose 15 cents to trade at 107.96 dollars per barrel. Both benchmark prices jumped by more than $5 a barrel on Wednesday, May 4.

The proposals, announced by European Commission President Ursula von der Leyen and requiring unanimous support by the 27 European Union countries to take effect, include a six-month cessation of supply of Russian crude oil and refined products by the end of 2022.

The proposal also proposes to ban within one month all shipping, intermediary, insurance and financing services offered by EU companies for the transport of Russian oil.

However, the European Union faces the task of finding alternatives as energy prices soar as it imports some 3.5 million barrels of Russian oil and oil products daily and also relies on Moscow's gas supplies.

Antara also reported that several eastern European Union countries were concerned that the suspension would not give them enough time to adapt.

Market participants await Thursday's meeting of the Organization of the Petroleum Exporting Countries and allied producers, known as OPEC+.

The group is expected to agree to raise its production target by 432,000 barrels per day (bpd) for June, four OPEC+ delegates told Reuters, sticking to plans for gradual monthly output increases.

In the United States, crude stockpiles rose modestly last week, according to the US Energy Information Administration (EIA). Inventories rose 1.2 million barrels as the United States released more barrels of its strategic reserves.