FRANKFURT, Germany — Oil prices rose Monday as the first strong measures to limit Russia’s oil profits over the war in Ukraine took effect, bringing with them uncertainty about how much crude will be lost to the global economy through the new sanctions or Russian retaliation.
International benchmark Brent crude rose 2% to $87.30 per barrel, a day after the OPEC alliance of oil producers, including Russia, made no changes to supply plans because the effects of the new restrictions on Russian oil remain unclear. Starting Monday are a European Union embargo on most Russian oil and a price cap of $60 per barrel on Russian exports to other countries imposed by the Group of Seven democracies and the European Union.
The EU ban on Russian oil moving by sea is “by far the biggest step to date to cut off the fossil fuel export revenue that is funding and enabling Russia’s barbaric invasion of Ukraine,” said Lauri Myllyvirta, lead analyst at the Finland-based Centre for Research on Energy and Clean Air.
“It took a long time to get here — but this arguably is one of the strongest responses to Putin’s war in Ukraine,” tweeted Simone Tagliapietra, an energy policy expert at the Bruegel think tank in Brussels.
Western leaders are walking a fine line between trying to cut Russia’s oil income and preventing an oil shortage that would cause a price spike and worsen the inflation plaguing economies and hurting consumers around the world. But Russia has said it will not sell oil to countries that observe the cap, which could take oil off global markets and raise energy costs, including for gasoline at the pump.