Crude oil at lowest level in 2022 amid EU-Russia Confrontation

EU member states and the G7 nations started applying their price cap on Russian oil prices, constituting a fresh factor why crude prices fell to fresh lows.

The EU Commission President Von der Leyen anticipated more sanctions ahead and WTI trades near a weekly low of $70.97 per barrel, the lowest since December 2021. WTI crude Oil retreated this week and trades at levels that were last seen in December 2021.

Oil stands just above $70 per barrel, after peaking at $81.71 per barrel on Monday. The weekly drop came after the European Council and G7 nations, agreed on a price cap on Russian oil applicable as of Monday, December 5.

The price cap on Russian oil will limit price surges driven by extraordinary market conditions and radically decrease the revenues Russia is earning from oil after the eruption of war in Eastern Europe. It will also serve to stabilize global energy prices while mitigating adverse consequences on energy supply to third countries.

Despite not directly referring to oil prices, European Commission President Ursula von der Leyen announced she will propose a ninth package of sanctions against Russia.