Oil price drop: Brent crude dips as European Union braces for vote on Russia oil ban

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Brent crude dropped by 28 cents (23 pence) to $112.11 (£91.30) a barrel in the early hours of Monday morning. US West Texas Intermediate crude also took a hit as it fell by 41 cents (33 pence) to $109.36 (£89.06) a barrel.

The market has been rocked by events in Brussels as the 27 EU member states discuss whether the bloc should introduce an embargo against Russian oil.

The move would require unanimity in the European Union.

However, Bulgaria’s Deputy Prime Minister Assen Vassilev said that Sofia would block the proposal unless the Balkan state gets a derogation from the plan.

He said: “The talks will continue tomorrow, on Tuesday too, a meeting of the leaders may be needed to conclude them.

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“Our position is very clear. If there is a derogation for some of the countries, we want to get a derogation too.”

He added: “If not, we will not support the sanctions.

“But I do not expect to get to that, based on the talks at the moment.”

Hungary, Slovakia and the Czech Republic, three nations which are particularly dependent on Russian oil, have also asked for a derogation from the ban.

EU negotiations come after the UK Government announced Britain would phase out Russian oil during the course of the year in March.

Speaking about the move at the time, Boris Johnson said: “In another economic blow to the Putin regime following their illegal invasion of Ukraine, the UK will move away from dependence on Russian oil throughout this year, building on our severe package of international economic sanctions.

“Working with industry, we are confident that this can be achieved over the course of the year, providing enough time for companies to adjust and ensuring consumers are protected.”

Business Secretary Kwasi Kwarteng added: “Unprovoked military aggression will not pay and we will continue to support the brave people of Ukraine as they stand up to tyranny, building on our existing sanctions that are already crippling Putin’s war machine.

“We have more than enough time for the market and our supply chains to adjust to these essential changes.

“Businesses should use this year to ensure a smooth transition so that consumers will not be affected.”

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Japan was also among one of the G7 members to announce on Sunday that it would phase out Russia’s oil imports “in principle”.

However, CMC Markets analyst Tina Teng suggested events in China have taken a toll on prices.

Teng said: “The broader risk-off sentiment sparked by the recession fears, and China’s lockdowns are the major factors that pressure the oil price.”

She added: “China’s ongoing lockdowns could continue to weigh on the near-term oil prices.”

Riyadh has taken steps which will see Saudi Arabia lower crude prices for Asia and Europe for Europe on Sunday.

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