London, Europe Brief News- Oil prices notched a weekly gain as supply deficit took centre stage with the EU mulling a potential curb on Russian oil imports.
Brent, the global benchmark for two-thirds of the world’s oil, settled 2.68% higher at $111.70 a barrel at the close of trading. West Texas Intermediate, the gauge that tracks US crude, closed 2.59 per cent higher at $106.95 a barrel.
This is the first weekly gain this month for both benchmarks in the holiday shortened week.
The price of oil has risen by more than 70% over the last 12 months. Barrel of Brent was 45 dollars in June 2017 to nearly 80 dollars in May 2018.
So, after three years of low prices, crude oil has returned to levels not seen since late 2014.
A New York Times report on Thursday suggested the EU was edging close to cutting Russian oil imports in a phased manner that will give Germany and others time to line up alternative suppliers for their energy needs.
Russia’s oil supply is expected to decline further amid sanctions by the US and its allies as Moscow continues its military offensive in Ukraine, according to the International Energy Agency (IEA). So far in April, about 700,000 barrels per day of production has been shut-in and losses are likely to grow to 1.5 million bpd for the entire month.
From May onwards, close to 3 million bpd of Russian production could be offline due to international sanctions. Widening customer-driven embargo comes into full force, the IEA said on Wednesday.
Ukraine-Russia War Pressure
The apparent gradual ban on Russian oil imports will be “adding tightening pressure to oil markets”, head of NBD, said.
Russia is the world’s second-largest energy exporter. It accounts for 10% of the world’s energy output, including 17% of its natural gas and 12% of its oil. The US and UK have already banned Russian oil imports.
The oil market has seen tumultuous trading since Russia’s war in Ukraine started in late February. Volatility in crude prices during the past few weeks has been at the highest level since June 2020.
