Ban on Russian imports?
The price of oil is skyrocketing
3/7/2022 2:32 am
Russia’s war of aggression in Ukraine is causing the price of oil to continue to rise. Since 2008, a barrel hasn’t been as expensive as it is now. A historic record price is not far away. The US and the EU are discussing a ban on Russian oil imports.
Due to the increasing fear of the effects of the Ukraine war on the global energy supply, the price of oil continues to soar: During the night the price for a barrel (159 liters) of North Sea Brent rose to a high of 139.13 dollars ( 127.86 euros) before falling to 128.77 dollars. This still corresponded to an increase of more than nine percent.
Oil prices have not been this high since 2008. Since the start of the Ukraine war at the end of February, the price of oil has risen by around a third. The historic record price for a barrel of Brent is $147.50.
The price of a barrel of US grade West Texas Intermediate (WTI) due in April climbed to $130.50 on Sunday. It then fell back to $125.15, still up more than 8 percent.
Even if Russian oil is currently theoretically exempt from Western sanctions, Russian exports are finding fewer and fewer buyers. The Anglo-Dutch company Shell was one of the few western oil companies to acquire 100,000 tons of Russian oil last week.
Russia is the world’s third largest oil producer. Even before the Ukraine conflict, prices were high as countries around the world recovering from the Corona crisis ramped up their economies and demanded large quantities of oil.
Ukrainian Foreign Minister Dmytro Kuleba told CNN on Sunday: “Stop buying Russian oil.” Russian oil and gas “smells of Ukrainian blood,” he said, extending his call to “all Western companies to pull out of Russia on ‘humanitarian’ grounds.”
The USA and the EU are currently discussing a possible ban on Russian oil imports. There are “very active discussions” on the subject, US Secretary of State Antony Blinken told US broadcaster CNN on Sunday. President Joe Biden’s administration is under increasing political pressure to extend sanctions on Russia to the energy sector. So far, this sector has been largely spared from the measures taken by the West.
On Thursday, Republican and Democratic senators presented a bill that would ban oil imports. Biden had previously stated that “nothing was ruled out” on the issue.
Federal Finance Minister Christian Lindner, however, spoke out against an embargo on raw material imports from Russia: “If we do without gas, oil and coal supplies from Russia, that means that prices in Western Europe and in the world will rise dramatically due to the expected shortages,” said the FDP politician at Bild TV. But even if Germany were to use the money, it would not be easy to buy coal, gas and oil elsewhere.
Lindner also ruled out tax cuts for fuel in view of the sharp rise in prices at gas stations. “The state can only cushion that, redistribute it, but it cannot cancel it,” said Lindner on Bild TV. Because the only way to finance such tax cuts would be through new debt, but “I’m not in favor of us taking a loan from our grandchildren for the current rise in fuel prices.”