Crude Oil Down 2% After Europe Backs Off Sanctions Plans, CPC May Resume Some Exports Soon, and the U.S. Plans to Release Strategic Reserves

Crude oil futures closed down more than 2% on Thursday (March 24), but remained above the $100 mark following reports that the European Union (EU) is likely to back away from its oil sanctions plans. In addition, it was reported that oil exports from the Caspian Pipeline Consortium (CPC) may be partially resumed soon.

  • WTI crude futures were down $2.59, or 2.3%, to close at $112.34 a barrel.
  • BRENT crude futures were down $2.57, or 2.1%, at $119.03 a barrel.

Crude oil futures fell after reports that EU member states remain divided over imposing sanctions on Russia’s energy industry, given the EU’s high dependence on Russian energy. Voices around the EU have already announced that the sanctions are probably not feasible.

Russian President Vladimir Putin announced that countries on the “Unfriendly” list will have to pay only in rubles for the purchase of natural gas and perhaps oil from Russia. The countries on the list are those that impose sanctions on Russia, such as the US, the EU and Canada.

Oil exports from CPC, a joint venture between Russia and Kazakhstan, could soon be partially resumed. Since Wednesday, CPC has been unable to export oil from its facilities on the Black Sea coast due to storm damage.

Oil also came under pressure after U.S. National Security Adviser Jake Sullivan said the United States and its allies had made progress in negotiations on the nuclear agreement with Iran.

Iran has the world’s fourth-largest oil reserves, but Iranian oil production has plummeted since the United States imposed sanctions on the country in 2018 after former President Donald Trump announced his withdrawal from talks on the 2015 nuclear agreement.

In addition, the U.S. government has stated that additional strategic oil reserves could be released to support supplies to allied countries.

The Spot Market is Open

Friday, March 25, 2022

Energy
Updated at
USD
Price

Change

%Change
Crude Oil
10.00

112.18

-0.16

-0.14%

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