Oil prices jump again as EU considers Russian oil embargo

A view of Phillips’ 66 Los Angeles Refinery (front), which processes domestic and imported crude oil into gasoline, aviation, and diesel fuels and storage tanks for refined petroleum products at Kinder Morgan Carson Terminal (background), at sunset in Carson, California, United States, 11 March 2022. The photo was taken on March 11, 2022. The photo was taken with a drone. Photograph: Beng Guan/Reuters

LONDON (Reuters) – Oil prices jumped more than $3 on Monday, with Brent crude rising above $111 a barrel as European Union countries consider joining the United States in a Russian oil embargo and after a weekend attack on Saudi oil facilities.

Brent crude futures rose $3.40, or 3.2%, to $111.33 a barrel by 0958 GMT, adding to its 1.2% rise last Friday.

US West Texas Intermediate crude futures rose $3.65, or 3.5 percent, to $108.35, to continue a 1.7 percent jump last Friday.

Prices rose ahead of talks this week between European Union governments and US President Joe Biden in a series of summits aimed at toughening the West’s response to Moscow over its invasion of Ukraine.

EU governments will consider whether to impose an oil embargo on Russia. Read more

Early Monday, Ukrainian Deputy Prime Minister Irina Verchok said there was no chance of troops surrendering in the besieged eastern port city of Mariupol. Read more

With little sign of easing the conflict, the focus is back on whether the market will be able to replace the sanctions-damaged Russian barrels.

“The Houthi attack on a Saudi power plant, warnings of a structural OPEC production shortfall and a possible EU oil embargo on Russia have sent oil prices higher in Asia,” Jeffrey Haley, chief analyst at OANDA, said in a note.

“Even if the Ukraine war ends tomorrow, the world will face a structural energy deficit thanks to Russian sanctions.”

Over the weekend, attacks by Yemen’s Iran-aligned Houthi group caused a temporary drop in production at Saudi Aramco (2222.SE) A joint venture of a refinery in Yanbu is fueling anxiety in a tense oil products market, where Russia is a major supplier and global stocks are at their lowest levels in several years. Read more

The latest report from the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, collectively known as OPEC+, showed that some producers were still falling short of agreed supply quotas. Read more

Additional reporting by Sonali Paul in Melbourne and Florence Tan in Singapore; Editing by David Goodman

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