(BFM Bourse) – After a brief lull, oil prices are rising sharply as the Biden administration prepares to announce an embargo on Russian oil, according to information from Bloomberg. The UK should do the same.
If the European Union still rules out, at this stage, doing without Russian oil and gas, imports of fossil energy described on Monday by German Chancellor Olaf Scholz as essential for the daily life of citizens in Europe, the States United and the United Kingdom, less dependent, would be them on the point of announcing an embargo.
This information, relayed by the economic and financial agency Bloomberg, is once again shaking the world oil markets on Wednesday. Shortly after 4 p.m., a barrel of Brent took off 7.6% to 132.5 dollars when the North American benchmark, WTI, traded at 128.6 dollars a barrel, up 7.8% compared to the day before. Up slightly in the morning, these two benchmarks greatly increased gains in response to rumors of an embargo from the Americans and the British.
Breaking for the first time the unity of the western front in terms of sanctions against Russia, Joe Biden is to announce on Tuesday a ban on imports into the United States of Russian oil and gas. The American president, who was under intense political pressure to make this decision, has pushed his agenda and will speak at 4:45 p.m. (Paris time) to “announce actions aimed at sanctioning Russia for its unjustified and unprovoked war” against the Ukraine, the White House said. This will be, according to several American media including Bloomberg, to announce a ban on imports of Russian hydrocarbons.
Crucial for the European economy (40% of natural gas needs and around 30% of its oil needs), Russian hydrocarbon supplies, on the other hand, represent only 8% of American imports of crude oil and petroleum products. The United States does not import any gas from Russia. “Concerns over such an announcement drive prices up,” said Fiona Cincotta, analyst at City Index, who points out that this “fuels fears about inflation”. Second world exporter, “Russia is not a producer whose extractions can be easily compensated by others”, underlines Giovanni Staunovo, analyst at UBS.
However, most buyers already avoided sourcing Russian oil as much as possible: “Everyone remembers the sanctions suffered by European companies which had traded with Iran while this country was subject to sanctions”, explains Benjamin Louvet , commodity manager at OFI Asset Management. Among the oil giants, only Shell dared to buy Russian oil last week… before announcing that it regretted this decision on Monday, adding that it would not be taken back. The British-Dutch “supermajor” has since announced its withdrawal from Russian oil and gas, as well as the closure of its service stations and the cessation of its aviation fuel and lubricants activities in Russia.
Also according to press reports, the United Kingdom should follow in the footsteps of the United States and also impose an embargo on Russian hydrocarbons on Tuesday.
On the side of Brussels, the European Union for its part presented on Tuesday solutions to cushion the impact of the current surge in energy prices and reduce by two-thirds the imports of Russian gas from the EU as of this year – before a summit on Thursday and Friday, where the Twenty-Seven who will meet in Versailles, should undertake to “get out” of dependence on Russian hydrocarbons.
Quentin Soubranne – ©2022 BFM Bourse