RIYADH: Oil futures extended gains on Tuesday morning on news that some European Union members are considering imposing sanctions on Russian oil and as attacks on Saudi oil facilities sent jitters through the market.
Front-month West Texas Intermediate futures were up $2.20, or 1.96 percent, to $114.32 a barrel.
Brent futures were up $3.18, or 2.75 percent, to $118.80 a barrel on the Intercontinental Exchange at 0440 GMT.
Both contracts had settled up more than seven percent on Monday as the potential for more supply disruptions weighed on the market.
EU members split over Russian energy ban
Meanwhile, EU member countries are split over the ban on Russian energy as their dependence on energy imports from Russia varies.
As the EU foreign ministers met at the bloc’s headquarters in Brussels on Monday, the member states failed to reach a consensus over sanctions against energy imports from Russia.
Foreign ministers from countries including Lithuania and Ireland called on to intensify sanctions against the Russian energy sector and have the embargo on Russian oil included in the bloc’s fifth package of sanctions.
Yet, the proposal was rejected by Germany and the Netherlands, which are heavily reliant on energy imports from Russia.
Overall, the EU is heavily reliant on Russian energy, which takes up a significant proportion of the EU annual imports.
Indian shares fall
Indian shares fell on Tuesday, dragged by heavyweight banking and consumer stocks, with a continued rise in crude oil futures denting sentiment further.
By 0410 GMT, the blue-chip NSE Nifty 50 was down 0.34 percent at 17,061.15, while the benchmark S&P BSE Sensex slipped 0.38 percent to 57,076.89.
The indexes gained about 4 percent last week, helped by falling oil prices, signs of progress in Russia-Ukraine peace talks, and further easing of local COVID-19 restrictions amid an expanded vaccination drive.
However, a lack of material progress in the peace talks amid continued fighting and a possible energy embargo against Russia by the European Union have sent oil prices soaring again.
China to boost renewable power, balance with oil and gas
China aims to increase renewable power, maintain crude oil output and boost natural gas production, as it seeks to balance energy security and achieve its climate change goals.
China, the world's biggest greenhouse gases emitter, has said its carbon emissions would peak by 2030 while it would achieve carbon neutrality by 2060.
Russia-related energy market shock could result in recession, says Vitol CEO
The energy market shock following Russia's invasion of Ukraine could tip the world into an economic recession, especially if the war drags on, according to the CEO of Dutch energy and commodity trading firm Vitol.
Speaking at the FT Commodities Global Summit, Russel Hardy said: “The longer the war goes on, the greater the chance of an economic recession.”
He said customers had told Vitol they did not want Russian crude and the trading firm has stopped spot purchases of oil from the country, although it has maintained existing longer-term contracts.
Even before Russia launched its invasion on Feb. 24, energy markets had little spare capacity and were set to struggle to absorb the potential loss of around 2 million barrels per day of oil from Russia, which competes with Saudi Arabia as the world's top oil exporter.
(With inputs from Reuters)
