Oil Update — Crude fluctuates; EU mulls Russian oil and coal import ban

Oil futures were mixed on Wednesday even as the threat of new sanctions on Russia raised supply concerns, and fears of weak demand from US crude stockpiles build-up and extended lockdown in China cast a long shadow on the market.

Brent crude futures were up 11 cents, or 0.1 percent, at $106.75 a barrel at 0339 GMT, having fallen to $105.06 earlier in the session.

US West Texas Intermediate futures fell 11 cents, or 0.1 percent, to $101.85 a barrel, after dipping to as low as $100.37 in early trade.

EU proposes Russian coal import ban

Meanwhile, amid the ongoing tensions in Ukraine, the EU Commission has proposed new sanctions against Russia, including a ban on buying Russian coal and allowing Russian ships to enter European ports.

The governing body is also planning to ban all oil imports from Russia. 

Cuba faces fuel shortage

According to analysts, Cuba is struggling to cover a fuel deficit as imports from Venezuela and other countries remain below historical levels. Global prices boosted by Russia’s invasion of Ukraine make purchases almost unaffordable.

The Caribbean country, which is dependent on fuel imports mostly from political ally Venezuela to cover more than half of its demand, is since last month dealing with diesel and gasoline shortages leading to long lines in front of stations.

Insufficient fuel import is another major hurdle for Cuba’s economy, which is struggling to recover following the coronavirus pandemic and harsher US sanctions imposed by the administration of former President Donald Trump.

Netherlands to further reduce the use of Russian oil

Dutch imports of Russian oil and coal have fallen due to the war in Ukraine, the Minister for Climate and Energy Rob Jetten said on Tuesday, adding that he would outline the government’s plan to reduce Russian energy dependence further later this month.

In a letter to parliament, he said he was “calling on companies to limit the import of Russian oil and coal as much as possible.”

Among significant energy users in the Netherlands, Tata Steel has stopped using Russian coal.

At the same time, Shell, which operates the Pernis oil refinery, Europe’s largest, halted purchases of Russian crude in March.

Iraq’s March oil output falls

Iraq pumped 4.15 million barrels per day, or bpd, of oil in March, 222,000 bpd short of its production quota under an agreement with other OPEC+ producers, data from state-owned marketer SOMO showed on Tuesday.

Iraq’s March output fell by 112,000 bpd from February, the data showed.

Like several other OPEC members, Iraq is struggling to pump more oil at a time of already tight global supply and soaring prices.

(With inputs from Reuters)