EU Agrees Partial Russian Oil Ban - Pipeline Flows Exempt

EU agrees to partial ban on Russian oil with Brent at 120$/bbl after spiking up to 121.89$/bbl late yesterday.

• Brent AUG 22 up 2.1% at 120.09$/bbl
• WTI JUL 22 up 3.7% at 119.34$/bbl
• Gasoil JUN 22 up 4.6% at 1251.25$/mt
• WTI-Brent down -0.22$/bbl at -4.72$/bbl
• The compromise deal reached late on Monday bans the purchases of seaborne crude in six months and seaborne oil products in eight months. Pipeline deliveries are exempt until a solution can be found for the nations dependent on the Druzhba pipeline.
• Hungary has agreed to the deal after EU has given them a guarantee that they would receive replacement supplies should pipeline flows be disrupted. Technical details are still to be agreed before the sanctions can be formally implemented by the member states. Ursula von der Leyen said the ban “will effectively cut around 90% of oil imports from Russia to the EU by the end of the year.”
• Elsewhere the easing of lockdown restrictions in China are driving the bullish sentiment. Crude futures are testing the higher levels seen back in March but the longer dated time spreads are already trading higher on the tight market fears. A potential pickup in Chinese demand and the delayed EU oil ban are pushing up prices later this year.
• Brent AUG 22-SEP 22 up 0.15$/bbl at 3.24$/bbl
• Brent DEC 22-DEC 23 up 0.93$/bbl at 15.89$/bbl