Oil edged lower on Tuesday after it looked unlikely that European Union nations would agree to join the United States in a Russian oil embargo in retaliation for its invasion of Ukraine.
EU foreign ministers were split on the ban as some countries, including Germany, say the bloc is too dependent on Russia’s fossil fuels to withstand such a step.
“It’s pretty clear that the German economy will seize up so the EU is backing away from a Russian ban,” said John Kilduff, partner at Again LLC in New York.
Brent crude fell 14 cents, or 0.2%, to settle at $115.48 a barrel. U.S. West Texas Intermediate crude ended 36 cents, or 0.3%, lower at $111.76. On Monday, both contracts had settled up more than 7% on the potential EU ban.
Adding to supply shortages, oil exports by Caspian Pipeline Consortium (CPC) may fall by around 1 million barrels per day (bpd) while it repairs two of three mooring points damaged by a storm in Russia’s section of the Black Sea, RIA news agency quoted Russia’s energy ministry as saying.
French oil major TotalEnergies, which has come under criticism after it stopped short of joining rivals Shell and BP in planning to divest oil and gas assets in Russia, said on Tuesday it would to quit Russian oil supply contracts.
Oil prices also drew support from threats to supply as Yemen’s Iran-aligned Houthi group attacked Saudi energy and water desalination facilities over the weekend. On Monday, Saudi Arabia said it would not bear responsibility for any global supply shortages after the attacks by the Houthis, signalling growing Saudi frustration with Washington’s handling of Yemen and Iran.
The oil market will watch the latest round of weekly U.S. inventory data for clearer direction. Analysts expect crude oil inventories to rise slightly. The American Petroleum Institute, an industry group, issues its supply report at 4:30 p.m., followed by official data on Wednesday.
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