Oil prices jumped on Monday as reports that the European Union (EU) is considering a ban on Russian energy stoked fears about crude supply.
The EU is highly dependent on Russian oil, covering almost 30 per cent of its import needs with crude oil from Russia, and in the case of diesel, Russian oil even accounts for as much as 80 per cent of its net imports. This means that large quantities would have to be obtained elsewhere, which would further tighten the market.
The International Energy Agency (IEA) said that the prospect of large-scale disruptions to Russian oil production is threatening to create a global oil supply shock.
It has been estimated that three million barrels per day of Russian oil output could be shut in from April, as sanctions take hold and buyers shun exports.