Oil Prices Extend Gains as European Union Mulls Russian Ban

Surged in crude oil demand bolstered prices on Monday as European Union member nations consider imposing restrictions on Russian oil import.

Brent crude oil, the global benchmark for Nigerian oil, gained more than $4 to $112 per barrel at 9:29 am Nigerian time. While the U.S. West Texas Intermediate (WTI) appreciated by $3.98 to $108.68, extending its Friday’s gain.

Prices jumped ahead of talks between European Union governments and the United States President Joe Biden on how to increase the West’s response to Moscow over its invasion of Ukraine.

According to people familiar with the series of summits expected to hold this week, the European Union will consider imposing an oil embargo on Russia.

This, experts are predicting would disrupt the supply of global crude oil and subsequently bolstered prices above the current level if implemented.

“A Houthi attack on a Saudi energy terminal, warnings of a structural shortfall in production from OPEC, and a potential European Union oil embargo on Russia have seen oil prices jump in Asia,” OANDA’s senior analyst Jeffrey Halley said in a note.

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

Oil prices could head towards $150 as previously projected if Russia-Ukraine failed to reach an agreement on their differences as soon as possible.

There were reports that President Putin and President Volodymr Zelenskyy of Ukraine agreed to meet face to face later this week, sadly no one knows which of the reports is the truth as Putin has previously refused such meeting.

Other commodity prices are expected to increase with currencies of commodity-dependent nations like Canada, Australia, New Zealand, etc likely to gain this week.