New Delhi: Crude oil prices rose on Wednesday following the European Union’s decision to impose restrictions on imports of Russian oil, albeit in a phased manner.
EU leaders on Monday agreed in principle to cut 90% of oil imports from Russia by the end of 2022, paving the way for the region’s toughest sanctions on Moscow since its invasion of Ukraine three months ago.
Russian crude oil imports will be phased out in six months and refined products in eight months. The embargo exempts pipeline oil from Russia as a concession to Hungary and two other landlocked Central European countries.
Analysts said lifting of lockdown restrictions in China’s financial hub Shanghai boosted demand prospects and supported prices.
However, crude is trading below Tuesday’s high.
At 1105 am today, Brent July futures were at $116.09 a barrel on the Intercontinental Exchange, up 0.42% from the previous close. West Texas Intermediate futures were up 0.49% to $115.23 a barrel on the NYMEX.
Rahul Kalantri, Vice President of Commodities at Mehta Equities, said: “Crude oil rally faded after a report that OPEC members were exploring the idea of exempting Russia from its oil production deal, which would provide more opportunities for other producers. Could open the door to pumping oil. Earlier, prices rose within a hair of $120, the highest since early March, as oil from Russia delivered by sea in the latest round of EU sanctions Buying will be prohibited, but includes a temporary exemption for pipelines.”
He said exempting Russia from oil production targets could pave the way for Saudi Arabia, the United Arab Emirates and other producers in the cartel to pump more crude.
“Markets are also eyeing the upcoming OPEC+ meetings and their stance on crude oil production. If OPEC+ maintains the status quo on production, it could further support prices,” Kalantri said, adding that crude oil prices are expected to remain volatile ahead of the release of US crude inventory data.
Back home, there was no change in the retail prices of petrol and diesel in India for the 10th day in a row. Petrol price in Delhi is 96.72 per liter, while being sold in diesel 89.62 per liter.
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