EU Proposes Ban on Oil Imports from Russia

The European Union is proposing to ban all oil imports from Russia by the end of this year and remove Russia's largest bank, Sberbank, from the SWIFT international payments network.

However, the plan immediately ran opposition from EU countries calling for a longer transition period, including Hungary, which is reported to have already been offered an additional year to abandon Russia's oil.

European Commission President Ursula von der Leyen said that the measure was part of the sixth round of sanctions against Russia's invasion of Ukraine.

The news of the proposal raised crude oil prices by about 4%. The global benchmark Brent was trading near $109 a barrel, while US oil futures were above $106 a barrel at 12:30 pm ET.

Oil prices have risen about 40% since the beginning of the year amid concerns that Russia's invasion of Ukraine could cause supply shocks, inflation, and pressure on the European economy.

The International Energy Agency recently predicted that Russia's oil supply would decline by 1.5 million barrels per day in April as demand slowed, accelerating these losses to 3 million barrels per day this month.

However, rising oil and gas prices worldwide mean that Moscow continues to make a fortune from energy exports. Rystad predicts that Russia will raise more than $180 billion in energy tax revenues this year, despite cuts in oil production, and is expected to increase by 45% from 2021.