Oil continues to climb after Western allies announce restrictions on Russian imports Business News

Crude oil extended its rally on Wednesday, after the US, EU and UK governments announced plans to ban or phase out oil and gas imports from Russia, following the violent invasion of Ukraine by country.

Brent Crude, the global oil benchmark, rose 1.9% on Wednesday morning. The energy source, which is also essential for a range of industrial processes, has soared nearly 90% in the past year.

Investors braced for an uneven rally in commodities after President Putin announced his intention to ban exports, without naming specific commodities or energy inputs.

Metals such as nickel and palladium, which are used in a range of industrial processes including car exhaust, have seen their prices soar this week. Palladium hit record highs this week and nickel trading was suspended in London on Tuesday after rising sharply.

Russian stock markets remained closed as the ruble fell 5% against the US dollar in Moscow on Wednesday.

Ratings firm Fitch Ratings said Russia could be pressured into defaulting on its debt by sanctions introduced by major economies.

(PA graphics)

“The further increase in sanctions and proposals that could limit energy trade increase the likelihood of a policy response from Russia that includes at least a selective non-payment of its sovereign debt obligations,” Fitch said.

Commodities rose after Business Secretary Kwasi Kwarteng announced that Britain would phase out imports of Russian oil and petroleum products by the end of the year, and the US government said he would introduce a ban covering the country’s energy exports.

The measure would “deprive President Putin of the economic resources he uses to pursue his wasteful war of choice,” according to a White House fact sheet.

These actions by the US and UK alone would only have a modest impact, as the two combine for a small share of the country’s energy exports. But the EU, a much bigger consumer of Russian energy, said it would aim to cut its consumption of the country’s natural gas by two-thirds by the end of 2022.

Even before the government announced the measure, economists had warned that the impact on food production and energy from the Russian invasion would amplify an existing cost-of-living crisis.

The government intervention came after oil giant Shell announced it would stop buying crude oil from the country, and its energy company BP said it would limit its activities to the minimum required for the safety of the country. ‘supply.

Government officials and business owners had been weighing new sanctions on Russia’s key energy exports as ship owners and dockside staff across the UK and beyond showed they were reluctant to handle the country’s cargo.

Major companies, including global brands such as McDonald’s and Coca-Cola, have announced they will suspend operations in Russia.

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This notice was published: 2022-03-09 08:43:30

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