Oil Prices Decline as G7, EU Move to Phase Out Russian Fuel
Oil prices declined in the global commodity market on Wednesday as markets weighed the US Federal Reserve’s upcoming rate decision and risks to supply from the Russia-Ukraine war.
Brent crude traded at $68.05 a barrel, down 0.2% from the previous close of $68.18. US benchmark West Texas Intermediate (WTI) slipped 0.01% to $64.08.
The Fed is expected to cut rates by 25 basis points later Wednesday, with markets eyeing updated economic projections and Chair Jerome Powell’s comments for signals on the policy path.
Analysts warned that while lower borrowing costs could lift demand, a global surplus is likely to persist as OPEC+ continues raising output. Meanwhile, geopolitical concerns are preventing sharper price declines.
European Commission President Ursula von der Leyen on Tuesday said that the bloc will propose speeding up the phase-out of Russian fossil fuel imports as part of its upcoming 19th package of sanctions against Moscow.
Her remarks came after Trump criticized European allies for what he described as “not tough enough” sanctions against Russia, particularly pointing to continued oil purchases.
In response, Russia increased sales of oil to countries such as China and India. The 27-member bloc has pledged completely phase out imports of Russian oil and gas by Jan. 1, 2028.
“Russia’s war economy, sustained by revenues from fossil fuels, is financing the bloodshed in Ukraine.
“To put an end to it, the Commission will propose speeding up the phase-out of Russian fossil imports,” von der Leyen said on the US social media platform X following a phone call with US President Donald Trump.
Her remarks came after Trump criticised European allies for what he described as “not tough enough” sanctions against Russia, particularly pointing to continued oil purchases.
“Europe is buying oil from Russia. I don’t want them to buy oil, and the sanctions that they’re putting on are not tough enough. I’m willing to do sanctions, but they’re going to have to toughen up their sanctions commensurate with what I’m doing,” he told reporters on Sept. 15.
The European Commission’s 19th sanctions package is expected to include further measures targeting Russia’s banking sector, energy revenues, and the use of cryptocurrencies to bypass restrictions.
Since the start of the war in Ukraine in February 2022, the EU has gradually banned imports of Russian coal and most crude oil, while placing financial sanctions on banks, companies, and individuals.
The G7 countries and the EU have imposed a price cap on Russian oil. In response, Russia increased sales of oil to countries such as China and India.
The 27-member bloc has pledged to completely phase out imports of Russian oil and gas by Jan. 1, 2028.
In the US, industry data released Tuesday by the American Petroleum Institute showed crude oil and gasoline inventories fell last week. Crude stockpiles dropped by 3.42 million barrels in the week ending Sept. 12.
Markets are now awaiting the US Energy Information Administration’s official figures, due late Wednesday, to confirm the trend. Zenith Bank Investors Are Taking Positions on Expectations
