Oil prices reached $120 for the first time in more than two months on Tuesday, according to foreign news reports, after European Union (EU) leaders voted to reduce Russian oil imports.
During the early hours of the day, global crude markets panicked, reaching their highest level in more than two months. Brent crude remained above $123 per barrel after briefly reaching $124.10, its highest level since March 9, 2022.
The price of US West Texas Intermediate (WTI) crude increased to $119.85 per barrel before closing at $118.5 per barrel.
Oil futures are up sharply from last month’s lows after the EU agreed in principle to drop 90% of Russia’s oil imports by the end of the year, thereby cutting off a vital source of funding for Moscow’s invasion of Ukraine.
For weeks, the 27-nation alliance has been discussing a total ban on Russian oil, but Hungarian Prime Minister Viktor Orban has declared that such an embargo would destroy his country’s economy.
After Poland and Germany, which are also connected to the pipeline, quit taking delivery of Russian oil by the end of the year, the embargo would reach 90 percent, thanks to new agreements uniting all parties against one another.
It’s worth noting that until now, tankers carried two-thirds of Russian oil imported into the EU, with the remaining one-third delivered via Poland’s Druzhba pipeline.
The remaining 10% will be exempt from sanctions for the time being in order for Hungary, Slovakia, and the Czech Republic, which are all connected to the pipeline’s southern end, to continue to have access to fuel that cannot be supplied soon.
If today’s Brent spike continues to average $120 a barrel for the next two weeks, Pakistan’s base price will most likely be Rs. 208 per liter. Inland Freight Equalisation Margin (IFEM) and additional margins add another Rs. 13 per liter, bringing the total to Rs. 221 per liter.
To read our blog on “Ghee and cooking oil prices are expected to skyrocket,” click here.
