The barrel of crude starts the week sharply higher, above $112 for Brent, on the prospect of new European sanctions against…
(Boursier.com) — The barrel of crude starts the week sharply higher, above $112 for Brent, on the prospect of new European sanctions against Moscow which this time could target the Russian oil sector. Although several countries still seem opposed to such measures, Lithuanian Foreign Minister Gabrielius Landsbergis indicated this morning that “it is inevitable to talk about the energy sector”.
Ahead of a meeting of EU foreign and defense ministers in Brussels, the leader said oil will be discussed because it is “quite easily replaceable” and generates the most revenue for the Russian budget. The Kremlin warned him that an EU embargo on oil from Russia would have a profound effect on the global crude market and hit the continent the hardest.
“This morning’s price rebound suggests that the oil boom is picking up again and could have the legs to continue for weeks,” Stephen Brennock, analyst at PVM Oil Associates, told ‘Bloomberg’. “Russian supply uncertainty will likely be a familiar theme for the foreseeable future and will keep price volatility at the higher end of the spectrum.”
In this tense environment, the announcement of several attacks against Saudi oil installations over the weekend added a little more oil to the fire. Houthi rebels in Yemen have attacked at least six sites across Saudi Arabia, including some run by Aramco. The Iranian-backed group notably targeted a fuel depot in Jazan, in the southwest of the kingdom, and a natural gas plant in the city of Yanbu, on the Red Sea.
“Even if the war in Ukraine ends tomorrow, the world will face a structural energy deficit given Russian sanctions,” warns Jeffrey Halley, principal analyst at OANDA.
The barrel of American light crude WTI (April contract) is currently climbing 4% to $108.7 on the Nymex, while the barrel of Brent North Sea (May expiry) gained 4.1% to $112.3 in London.
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