Russian foreign ministry says EU oil sanctions will lead to further price rises

The Russian Foreign Ministry said June 2 that the latest EU sanctions restricting imports of Russian oil and banning shipping insurance, will lead to further price rises.

Oil prices have seen major volatility in recent months, as Russia's invasion of Ukraine raised supply security risks and triggered sanctions and self-sanctions on purchases of Russian oil.

Dated Brent was assessed at $100.49/b by S&P Global Commodity Insights on Feb. 23 – the day before Russia invaded Ukraine. It soared to $137.64 March 8 before dropping back down. It was last assessed at $122.96/b on June 1.

"The EU's decisions to partially phase out Russian oil and oil products, as well as to ban the insurance of Russian merchant ships, are highly likely to provoke further price increases, destabilize energy markets, and disrupt supply chains," the Russian Foreign Ministry said in a statement.

On May 30, EU leaders agreed to ban most Russian oil imports. Deliveries via the Druzhba pipeline are excluded from the ban.

Platts Analytics estimates the latest EU measures will hit some 1.9 million b/d of Russian crude imports by the year end, with some 300,000 b/d still flowing to Hungary, Slovakia and the Czech Republic via pipeline. Another 1.2 million b/d of refined product imports from Russia would cease by the end of the year.

Hungarian imports via Druzhba are currently at around 20,000 mt/day, Peter Szijjarto, Minister of Foreign Affairs and Trade of Hungary said June 2.

"We have a very stable supply of that amount of oil on a daily basis, so what we count on is that deliveries will be according to the contract," Szijjarto said.