Oil Surges As EU Divided Over Russian Oil Ban

EU member states are divided over whether or not to implement a ban on Russia oil imports. Officials have added that Poland and other EU states are pushing for the ban and Germany is facing growing pressure.

Oil had its biggest daily swing ever with Brent surging to near USD 140 before pulling back sharply after the United States said it was considering a ban on Russian crude imports.

The international benchmark subsequently pulled back to about USD 120 and West Texas Intermediate traded above USD 116, exacerbating fears of a major inflationary shock to the global economy.

The Biden administration is mulling whether to prohibit Russian oil imports without the participation of allies in Europe, at least initially, according to people familiar with the matter.

Prices pared gains after Germany said it has no plans to halt Russian energy imports, bolstering the volatility in the market. Diesel futures in Europe and the US touched the highest in decades, while gasoline contracts also leaped to highs not seen in more than a decade.

Shell Plc is limiting sales of heating oil in some parts of Germany as supplies of the fuel come under pressure.

A ban on Russian oil exports would be a major step for the White House. The move would likely need the agreement or approval from OPEC, who would need to boost output, along with the US, to avoid a major supply shock that potentially could drive prices even higher.