Crude oil prices increased by 4% on Wednesday as the European Union announced intentions to phase out Russian oil imports as part of penalties for Russia’s invasion of Ukraine.
By 1121 GMT, Brent crude futures had risen $3.99, or 3.8 per cent, to $108.96 per barrel. Reuters reported that West Texas Intermediate crude futures increased $4.05, or 4%, to $106.46 a barrel.
The news came as President Ursula von der Leyen of the European Commission recommended a phased oil embargo on Russia in response to its war in Ukraine, as well as sanctions against Russia’s central bank, in an attempt to further isolate Moscow.
“Crude oil supply would be phased out within six months, and imports of refined oil products by the end of 2022.”
According to the International Energy Agency, Russia is the world’s second-largest crude oil exporter.
“Russian oil is now ‘bad oil,'” SEB chief commodities analyst Bjarne Schieldrop told Reuters.
“This energy conflict between ‘good oil’ and ‘bad oil’ has just just begun.”
Investors are also anticipating the US Federal Reserve’s announcement on Wednesday.
It is likely to step up efforts to lower rising inflation by increasing interest rates and shrinking its balance sheet.
Any increase in oil prices will currently benefit Nigeria, which relies heavily on oil for revenue.
