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EU prepares to ban Russian oil

Posted June. 01, 2022 07:24,   

Updated June. 01, 2022 07:24


The European Union (EU) agreed to impose an immediate ban on Russian crude oil imports by sea as part of Ukraine invasion sanctions on Monday (local time). This amounts to roughly 65% of Russian oil imports by the E.U. The E.U. has also announced that it will reduce the amount of Russian crude oil imports by 90% by the end of this year by phasing out the Russian crude oil delivered via inland pipelines, which account for the remaining 35%. Following the E.U. announcement, the international crude oil prices jumped on Tuesday over $120 per barrel during the session for the first time just in two months.

The South Korean government, which has launched efforts to stabilize ‘food-at-home prices,’ is paying keen attention to the possibility that rising international oil prices will lead to price hikes in domestic gasoline and diesel prices, which in turn will drive inflation higher.

European Commission President Ursula von der Leyen announced after the E.U. summit held in Brussels, Belgium, that the Commission will "immediately ban seaborne Russian oil imports, including by tanker ship.” The sanctions exclude inland pipeline imports as Hungary and some other countries, which are highly dependent on Russian oil, opposed a total ban.

The situation seems to be escalating into an energy war between Europe and Russia after Russia cut natural gas supply to the Netherlands following the nation’s refusal to pay in rubles.

After the E.U.'s announcement of the sanctions, Brent crude oil prices traded on the ICE Futures Europe in London reached nearly $124 at one point on Tuesday.

Youn-Jong Kim zozo@donga.com