The Brussels oil embargo could increase prices by 70 percent

A ban on the import of Russian oil may soon be added to the ever-expanding list of sanctions against Russia, reports Portfolio. An oil embargo in the EU is conceivable, reports Portfolio.

They added: in this regard, the President of the European Commission has already confirmed that they are working on such a measure. If the EU were to announce a full and immediate embargo, then according to JP Morgan, it is possible that the price of Brent could hit 185 dollars, which means that an increase of more than 70 percent from the current levels can be expected. Reuters yesterday that

the European Union is preparing to impose a complete embargo on Russian oil after the French elections at the weekend.

The oil embargo would only be brought up for negotiation between the EU member states after the French elections, so that the impact on gas prices would not help the right-wing populist candidate, Marine Le Pen.

You can walk backwards

An immediate embargo measure by the European Commission would have a severe impact on the global oil market and would entail significant upside price risks in the short term. A total and immediate embargo is likely in the short term

would hit European consumers more than Russian producers,

and would raise the price of Brent crude oil to $185 per barrel. Currently, the price of Brent is at $108, which would mean an increase in price of more than 70 percent. However, if Europe were to implement the embargo more slowly – similar to the European ban on Russian coal imports, where there is a four-month standstill period – prices would likely not rise much higher than they are now. Russia would have more time to direct its oil shipments to friendlier countries, they write.

The EU is also considering less drastic alternatives,

such would be the introduction of special taxes and price limits on the import of Russian oil into Europe. This could represent a politically acceptable middle ground that would allow the EU to show its strength while maintaining Russian energy supplies, Portfolio writes.

Featured image: MTI