The prices of crude oil rose on Tuesday after the European Union agreed in principle to cut 90 per cent of oil imports from Russia by the end of the year.
Brent futures contract for July, which expires on Tuesday, rose $2.11, or 1.7 per cent, to $123.78 a barrel by 1103 GMT, after earlier rising to $124.10 – its highest since March 9. The August contract rose from $1.57 to $119.17.
The premium of August-loading Brent contracts over a six-month spread hit a nine-week high at close to $15 a barrel, indicating current supply tightness.
U.S. West Texas Intermediate (WTI) crude was trading at $118.53 a barrel, up to $3.46 in a fourth consecutive session of gains, up 3 per cent from Friday’s close, hitting its highest since March 9. There was no settlement on Monday due to a U.S. public holiday, Reuters reported.
The development came immediately after the EU agreed to ban 90 per cent of oil imports from Russia by the end of the year.
Earlier in May, European Commission President Ursula von der Leyen announced that European Union countries would stop importing Russian oil in the next six months.
On Monday, the EU announced it has agreed to ban 90 per cent of Russian oil imports by the end of the year as part of sanctions for Russia’s invasion of Ukraine.
READ ALSO: Crude oil rose 4% as EU proposes ban on Russian oil
“Agreement to ban the export of Russian oil to the EU. This immediately covers more than two-thirds of oil imports from Russia, cutting a huge source of financing for its war machine,” European Council chief Charles Michel said in a tweet at the end of the first day of a two-day leaders’ summit.
“Maximum pressure on Russia to end the war,” Mr Michel added.
Russia is the world’s second-biggest crude oil exporter, according to the International Energy Agency (IEA).
Any rise in price presents a bitter-sweet scenario for Nigeria which relies mostly on oil for its revenue and foreign earnings, but also has to pay higher subsidies to keep the price of imported fuel low back home.
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