Oil prices rally as Europe agrees to restrict Russian oil
Originally uploaded on June 01, 2022
Oil prices increased this week after European Union leaders agreed to a partial and phased ban on Russian oil and China ended its COVID-19 lockdown in Shanghai.
EU leaders agreed in principle to cut 90% of oil imports from Russia by the end of this year, the bloc's toughest sanction yet on Moscow since the invasion of Ukraine three months ago, which Moscow calls a "special military operation". Once fully adopted, sanctions on crude oil will be phased in over six months and on refined products over eight months. The embargo exempts pipeline oil from Russia as a concession to Hungary.
"However, with Germany and Poland already confirmed they won’t be buying Russian oil via pipeline or sea, the total effect would be to cut 90% of Russian crude sales to the EU by year’s end," analysts from ANZ Research said in a note.
Meanwhile, in China, Shanghai's draconian COVID-19 lockdown ended at midnight on Wednesday morning after a gruelling two months. This has prompted expectations of firmer fuel demand from the country as its economy starts moving again.
Here in the UK, retail pump prices will continue to edge higher. Those using fuel cards should expect an increase in the region of 6 pence per litre for next week.
With the jubilee weekend being this week, make sure you have planned your routes in advance to account for more traffic and higher fuel costs.