Oil prices jump after EU leaders agree to ban most Russian crude imports

Oil costs jumped after EU leaders reached an settlement late Monday to ban 90% of Russian crude by the tip of the yr.

Throughout Asia hours on Tuesday, U.S. crude futures have been up greater than 2% to $117.74, whereas Brent crude futures rose 0.62% to $122.43.

The settlement resolves a impasse after Hungary initially held up talks. Hungary is a significant consumer of Russian oil and its chief, Viktor Orban, has been on pleasant phrases with Russia’s Vladimir Putin.

Charles Michel, president of the European Council, mentioned the transfer would instantly hit 75% of Russian oil imports.

The embargo is a part of the European Union’s sixth sanctions bundle on Russia because it invaded Ukraine. Talks to impose an oil embargo have been underway for the reason that begin of the month.

“The European Council agrees that the sixth bundle of sanctions in opposition to Russia will cowl crude oil, in addition to petroleum merchandise, delivered from Russia into Member States, with a brief exception for crude oil delivered by pipeline,” in accordance with a Could 31 assertion from the European Council.

That non permanent exception covers the remaining Russian oil not but banned, European Fee President Ursula Von der Leyen mentioned in a press convention.

“We’ve got agreed that the Council will revert to the subject as quickly as doable in come what may. So this can be a subject the place we’ll come again to and the place we’ll nonetheless should work on, however this can be a large step ahead, what we did as we speak,” she mentioned, referring to the non permanent exemption.

The European Council added that in case of “sudden interruptions” of provide, “emergency measures” might be launched to make sure safety of provide.

Roughly 36% of the EU’s oil imports come from Russia, a rustic that performs an outsized position in world oil markets.

The ban might exacerbate worries over an already-tight power market. Power costs have soared over the previous yr, contributing to a heated inflationary atmosphere in lots of international locations.