Oil prices rose more than 7% on Monday, with global benchmark Brent crossing $115 a barrel, as European Union countries debated whether to join the US in a Russian Oil embargo following an attack on Saudi Oil installations. Brent crude futures closed at $115.62 per barrel, up $7.69 or 7.12%, while WTI crude futures in the United States settled at $112.12 per barrel, up $7.42 or 7.09 percent. According to John Kilduff, a partner at Again Capital LLC, such an embargo “may be the precipice for global supply trouble.”
Due to the uncertainty surrounding the EU’s possible ban on Russian petroleum imports, U.S. gasoline futures have risen 5%. As European Union nations assemble this week with US President Joe Biden for a series of summits aimed at hardening the West’s response to Moscow, they will decide whether to impose an energy embargo on Russia in response to its invasion of Ukraine.
The EU and its partners have already slapped a slew of sanctions against Russia, including blocking the assets of its central bank. In Mariupol, where hundreds of thousands of residents have been besieged in a city under siege, Ukraine ignored a Russian demand that its men lay down arms before sunrise on Monday. With no signs of the war diminishing, the question of whether the market could replace Russian barrels affected by sanctions resurfaced.
Attacks by Yemen’s Iran-aligned Houthi group triggered a brief slowdown in output at a Saudi Aramco joint venture refinery in Yanbu over the weekend. Saudi Arabia stated on Monday that it would not be held liable for any global Oil supply disruptions as a result of the assaults, indicating rising Saudi dissatisfaction with the US’s handling of Yemen and Iran.