Oil prices remained elevated during early trading on May 30 as traders await Europe’s decision on Russian oil import sanctions.
The Brent crude oil futures contract for July hit $120.02 per barrel at 11 a.m. UTC (7 a.m. Eastern time) on May 30, its highest level in over two months. Meanwhile, U.S. West Texas Intermediate (WTI) crude futures hit $115.72 per barrel. The European Union is scheduled to meet on May 30–31 to discuss the sixth package of sanctions against Russia for its invasion of Ukraine.
In its past five sanction packages, the EU targeted over 1,000 key Russian individuals, banks, and businesses. The sixth package was announced on May 4 but EU member states have yet to arrive at a consensus about implementing it, since many nations are highly dependent on Russian energy imports.
Europe is the largest purchaser of Russian energy. About 27 percent of the bloc’s crude oil imports in 2021 came from Russia. This comes to about 2.4 million barrels per day of oil, out of which 35 percent was delivered through pipelines.
EU countries like Hungary, Slovakia, Bulgaria, and the Czech Republic are not in a position to take steps against Russian oil.
Over 60 percent of Hungary’s oil and 85 percent of its natural gas come from Russia. Landlocked Slovakia and the Czech Republic rely on the Druzhba pipeline from Russia to meet their oil demands. The EU had proposed a longer transition for these three nations as well as 2 billion euros ($2.15 billion) in funding to boosting oil infrastructure.
“We do understand their special situation, we do understand their security of supply problem, we do understand their search for assurances to be able to solve that,” the diplomat said.
Despite the EU’s intention to hurt Russia for attacking Ukraine, the bloc’s purchase of Russian oil and gas is supporting Moscow in the war, he pointed out.
“In the absence of firm additional retaliatory measures, the EU still finances Russia in the conflict. In the first three months of the war, it acquired energy in the value of $60 billion, hardly a recipe to cause financial strain for the invader,” Varga said.