Oil prices are sharply higher after the European Union (EU) proposed a phased oil embargo on
Russia in retaliation for its war in Ukraine.
The plan, if agreed to by European governments, would phase out supplies of Russian crude oil
within six months and refined products by the end of this year.
The price of Brent crude oil, the international benchmark, rose 3% to more than $108 U.S. a
barrel on news of the European embargo. West Texas Intermediate crude oil, the U.S.
benchmark, also rose 3% to $105 U.S. per barrel.
The embargo would follow the U.S. and Britain, which have already imposed bans to cut one of
the largest income streams to the Russian economy.
European countries buy more than half of their crude and petroleum products from Russia and
will need to find alternative supplies within six months and as winter approaches.
Additionally, the European Union has proposed sanctions on Russia’s top bank called
“Sberbank” (SBER), and to ban Russian broadcasters from European airwaves, in its toughest
measures yet to punish Moscow for its invasion of Ukraine.
Ambassadors from the EU's 27 governments are expected to adopt the Commission proposals
as early as this week, allowing them to quickly become law.
Less reliant on pipelines, oil can be shipped from other sources and the European Union hopes
its gradual embargo will avoid an oil shock.
