Total Ban On Russian Oil Could Make Energy Prices Soar Again: REPORT
Global energy prices could rebound to previous highs after the European Union (EU) rolls out a total ban on Russian oil imports, which could further constrict the world’s oil supply, CNBC reported Thursday.
EU countries decided to ban Russian crude oil in early June to punish Russia for invading Ukraine; however, the ban, which will take effect on Dec. 5, could further squeeze global oil supplies and make fuel more expensive, according to CNBC.
In anticipation of the ban, the U.S. and its allies in the Group of Seven wealthy nations (G7) as well as the EU are also planning to set a price cap on the same day.
A total ban on Russian crude could be “really disruptive” to international energy markets, Director of Energy, Climate and Resources at political risk consultancy Eurasia Group Henning Gloystein told CNBC.
The ban would cut off all oil imports from Russia, the world’s third-largest oil exporter in 2021, which is why the U.S. and its allies are attempting to set the price cap below the average price of Russian oil, which was $66 per barrel on Wednesday.
Although gasoline prices have fallen to levels that preceded the war in Ukraine, they could rise again due to the EU’s Russian oil embargo, Patrick DeHaan, head of petroleum analysis at GasBuddy, told The Washington Post on Wednesday.
Fuel shortages are halting European manufacturing as factories cannot afford to pay their skyrocketing electricity bills and the EU is attempting to set a price cap on electricity in order to help its industries stay alive, according to Forbes.
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