(Boursier.com) — Oil prices rose more than 7% on Monday, returning to their highest level in ten days, buoyed by the prospect of a European embargo on Russian oil in retaliation for its invasion of Ukraine.

The barrel of American light crude WTI (April contract) thus rose 7.08% on Monday to 112.12 dollars on the Nymex, while a barrel of Brent North Sea (due May) gained 7.1% to $115.62 in London.

Prices were supported by reports that EU governments are considering imposing an oil embargo on Russia this week, although Germany has expressed reluctance. In addition, the announcement of several attacks by Houthi rebels this weekend against Saudi oil facilities has added fuel to the fire. Russia is the second largest oil producer in the world.

No EU decision on Russian oil yet

The European ministers of Foreign Affairs and Defense, meeting on Monday in Brussels, discussed the issue of the embargo, without taking a decision. Poland and Lithuania have urged the EU to implement the measure, but Germany and other countries highly dependent on Russian hydrocarbons have opposed it.

The European Union is ready to take a fifth wave of sanctions against Russia, however, the head of European diplomacy, Josep Borrell, declared on Monday at the end of the meeting. EU ministers also agreed on Monday on a security strategy aimed at strengthening the military weight of the 27.

The issue of the oil embargo will be raised again, this time at the level of the EU Heads of State and Government, during a summit scheduled for Thursday in the presence of US President Joe Biden.

The EU imports about 25% of its oil from Russia.

Propelled to nearly $140 a barrel in the days after Russia’s invasion of Ukraine, Brent prices corrected more than 20%, with the energy sector excluded from economic sanctions against Russia for the time being. The United States and the United Kingdom, for their part, announced on March 8 an embargo on the import of Russian fossil fuels, on which they depend less than the European Union.

At the moment, Russian oil accounts for around 25% of EU oil imports, while for the United States (the world’s leading crude oil producer), the share of Russian oil is only 7%. The EU also imports 40% of its gas from Russia (55% for Germany), as well as 45% of its coal, hence its reluctance to impose an immediate embargo on Russian energy, impossible to replace in the short term. …

A shortage of at least 3 million Russian barrels a day from April?

Oil prices then rebounded sharply from last Wednesday, when the International Energy Agency (IEA) announced fears of a hit to global oil supply following sanctions against Russia. The IEA noted that many companies (oil companies, brokers, banks, etc.) have turned away from Russia since its attack on Ukraine.

The agency believed that 3 million barrels per day of Russian oil (i.e. approximately 3% of daily global consumption) could be not available from April, or even longer in case of increased sanctions against Moscow. However, to compensate for these losses, “there is little sign of an increase in supply from the Middle East or a significant reallocation of trade flows,” the IEA warned.