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The war in Ukraine has prompted countries in the West to shun Russian energy supplies.

Russia currently covers 27 percent of the oil imports brought in by the European Union, and 40 percent of its gas supplies. The European Union pays Russia regarding 400 billion euros annually in return.

The embargo, approved by EU leaders, would see an immediate ban on the transport of Russian oil to the bloc by sea. Two-thirds of Russian oil arrives by sea.

However, the agreement, which followed weeks of controversy, includes a temporary exemption for the oil pipeline following opposition from Hungary.

And pledges by Poland and Germany to stop importing oil through pipelines by the end of this year will increase the ban’s coverage to 90 percent of Russian imports.

Brent crude, the global benchmark for oil prices, has risen more than 70 percent over the past year.

Oil prices rose once more following news of the European ban, with Brent crude reaching its highest level since March.

Ross Mold, investment director at AJ Bell Investment Services, said the EU’s assertion that it would reduce its purchases of Russian oil by the end of 2022 would send prices higher, because European countries now need to find alternative sources of supply.

“It is not feasible to replace this amount of energy with other fuel sources, such as wind, solar, biomass or nuclear, in such a short period of time, so the EU needs to find oil and gas from somewhere,” Mold said.

“It won’t be easy because the current global production may already be contracted, so the competition for things not in the contract will now be much hotter.”

Sophie Lund-Yates, senior equity analyst at Hargreaves Lansdown, said the upward trajectory of oil prices may continue until Western countries clearly define how to get supplies.

“It is possible that this situation will become more difficult before it gets better,” she said.

“We know that rising energy costs are a particular challenge for families, who are already hard-pressed on their incomes, but small businesses shouldn’t be left out of the equation either – this is a tough time for office heating, and it comes at a time when we should have regained our ability to get back to work. before the pandemic.

European Council President Charles Michel said the deal cut off a “huge source of funding” for Russia’s war machine.

It is part of a sixth package of sanctions agreed at a summit in Brussels, which all 27 member states had to agree on.

So far, no sanctions have been imposed on Russian gas exports to the European Union, although plans to open a new gas pipeline from Russia to Germany have been frozen.

European Union members spent hours struggling to resolve their differences over the ban on Russian oil imports.

Hungary, which imports 65 percent of its oil from Russia via pipelines, has resisted the new package of sanctions.

Nor did the cost of living crisis being felt across Europe help. Extremely high energy prices have, among other things, dampened the willingness of some EU countries to impose sanctions that might also harm their economies.