The case against divestment from Russian oil

The case against divestment from Russian oil

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Russia’s war in Ukraine continues to fuel soaring oil prices. Brent crude briefly topped $116 a barrel during trading yesterday, the highest level since June 2008.

Analysts see little relief on the horizon with markets pricing in a significant disruption to Russian oil supply. For now, Russian oil is being kept off the market through “self-sanctioning” as banks and traders avoid the country’s crude to protect their reputations and out of fear of any sanctions that may be coming. Nobody wants to get stuck with a $200mn cargo of Russian oil they can’t sell. Similarly, nobody wants headlines that they’re funding Russia’s war effort.

The Biden administration has tried to quell oil’s rally by insisting it did not intend to target the flow of Russian energy. But as efforts to punish Vladimir Putin gather pace, that has come into doubt. President Joe Biden left the door to those sanctions open yesterday, saying “nothing is off the table” in response to questions about the possibility of embargoing Russian oil.

At the same time, the Opec+ alliance of oil producers, which includes Russia, isn’t stepping into the breach. It said yesterday it is sticking to plans to