Oil prices jump as EU mulls Russian ban, Saudi refinery output hit

A well head and drilling rig in the Yarakta oilfield, owned by Irkutsk Oil Company (INK), in the Irkutsk region, Russia, March 11, 2019. (Reuters)

SULAIMANI (ESTA) — Oil prices jumped $3 on Monday, with Brent above $110 a barrel, as European Union nations consider joining the United States in a Russian oil embargo, while a weekend attack on Saudi oil facilities caused jitters.

Brent crude futures climbed $3.52 to $111.5 a barrel by 0443 GMT, adding to a 1.2% rise last Friday.

U.S. West Texas Intermediate (WTI) crude futures rose $3.66 to $108.4, extending a 1.7% jump last Friday.

Prices moved higher ahead of talks this week between European Union governments and U.S. President Joe Biden for a series of summits that aim to harden the West’s response to Moscow over its invasion of Ukraine.

EU governments will consider whether to impose an oil embargo on Russia.

With little sign of the conflict easing, the focus returned to whether the market would be able to replace Russian barrels hit by sanctions.

“A Houthi attack on a Saudi energy terminal, warnings of a structural shortfall in production from OPEC, and a potential European Union oil embargo on Russia have seen oil prices jump in Asia,” Reuters quoted OANDA’s senior analyst Jeffrey Halley as saying.

“Even if the Ukraine war ends tomorrow, the world will face a structural energy deficit, thanks to Russian sanctions.”

Over the weekend, attacks by Yemen’s Iran-aligned Houthi group caused a temporary drop in output at a Saudi Aramco refinery joint venture in Yanbu, feeding concern in a jittery oil products market, where Russia is a key supplier and global inventories are at multiple-year lows.

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