Oil prices soar as West mulls Russian crude ban
As the United States and its European allies are discussing a ban on Russian oil imports, industry analysts are of the view that this might ring further spike in the prices of oil. It is believed that a ban on Russian oil could push prices to $150 per barrel all-time high as it hit more than $130 per barrel on Sunday evening following rumours of a possible embargo of Russian crude oil.
Anthony Blinken, the U. S. Secretary of State alluded to this when he told NBC, “We are now in very active discussions with our European partners about banning the import of Russian oil to our countries, while of course, at the same time, maintaining a steady global supply of oil.”
“The goal is to isolate Russia and to make it impossible for Putin to finance his wars,” European Commission President Ursula von der Leyen told CNN on Sunday. “For us, there is a strong strategy now to say we have to get rid of the dependency of fossil fuels from Russia.”
Europe is heavily dependent on Russian gas and crude. There is therefore the need to seek an alternative source of fuel for Europe. The willingness of European governments to explore the ban option could be interpreted to mean that a viable alternative has been found.
Meanwhile, U.S. Congress is also working on its own set of sanctions targeting Russian oil, even though the United States imports roughly 200,000 bpd of Russian crude and about half a million in refined products that may be difficult to replace because of sanctions against Venezuela and Iran.
Analysts are however warning that a ban on Russian oil would push prices even higher.
“Prices are likely to rise in the short term, with a move toward $150 a barrel not out of the question,” the analysts also said, “Such a move will put further pressure on global economies, pushing inflation higher, leaving central banks debating how quickly rate hikes should be implemented.”
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