Oil prices jump after EU leaders agree to ban most Russian crude imports

Oil prices jumped after EU leaders reached an agreement late Monday to ban 90% of Russian crude by the end of the year.

During Asia hours on Tuesday, U.S. crude futures were up more than 2% to $117.74, while Brent crude futures rose 0.62% to $122.43.

The agreement resolves a deadlock after Hungary initially held up talks. Hungary is a major user of Russian oil and its leader, Viktor Orban, has been on friendly terms with Russia’s Vladimir Putin.

Charles Michel, president of the European Council, said the move would immediately hit 75% of Russian oil imports.

The embargo is part of the European Union’s sixth sanctions package on Russia since it invaded Ukraine. Talks to impose an oil embargo have been underway since the start of the month.

“The European Council agrees that the sixth package of sanctions against Russia will cover crude oil, as well as petroleum products, delivered from Russia into Member States, with a temporary exception for crude oil delivered by pipeline,” according to a May 31 statement from the European Council.

That temporary exception covers the remaining Russian oil not yet banned, European Commission President Ursula Von der Leyen said in a press conference.

“We have agreed that the Council will revert to the topic as soon as possible in one way or the other. So this is a topic where we will come back to and where we will still have to work on, but this is a big step forward, what we did today,” she said, referring to the temporary exemption.

The European Council added that in case of “sudden interruptions” of supply, “emergency measures” will be introduced to ensure security of supply.

Roughly 36% of the EU’s oil imports come from Russia, a country that plays an outsized role in global oil markets.

The ban could exacerbate worries over an already-tight energy market. Energy prices have soared over the past year, contributing to a heated inflationary environment in many countries.