Oil Prices Tumble After EU Fails To Agree On Russian Import Ban

As Austria had already indicated, several European countries failed to agree on a ban on imports of Russian crude.

The U.S. and U.K. have moved to ban imports of Russian crude, but several European Union countries have resisted pressure for an embargo due to their heavy reliance on supplies from the country.

And that sent crude prices lower (WTI back to a $108 handle)…

Prices are also falling because the Caspian Pipeline Consortium said crude loadings have resumed out of its terminal on Russia’s Black Sea coast after an interruption earlier this week due to bad weather

Biden and European Commission President Ursula von der Leyen announced a joint task force to reduce Europe’s dependence on Russian fossil fuels and strengthen European energy security.

“In the near term, we believe that outcomes for markets will focus primarily on the question of when we will reach — or if we have already reached — peak sanctions and oil prices,” said UBS Wealth Management CIO Mark Haefele.

There’s also growing anxiety that Europe might run out of diesel following Russia’s invasion of Ukraine.

The continent only has about 40 days supply of the crucial fuel in its stockpiles. Europe has historically taken about 20% of its imports from Russia. But European oil companies are shunning petroleum supplies from the country as the fighting spills into a second month, and instead are seeking shipments from as far afield as the Middle East, Asia and the U.S. Shell, BP and TotalEnergies are already restricting deliveries of the fuel in Germany.

All of which has sent European diesel prices to extreme highs relative to Brent…

Europe’s self-interested (and why not) decision is not exactly the unity that Biden proclaimed… and besides, Biden already said that sanctions don’t deter but that the pain for the west will continue.