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US Fears Hike in Oil Prices if EU and UK Ban Insuring Tankers With Russian Oil, Reports Suggest

MOSCOW (Sputnik) - The United States is deeply concerned about a possible increase in oil prices in the event the United Kingdom and the European Union impose a ban on insurance for tankers carrying Russian oil, and is, thus, urging its allies to ease future sanctions, The Financial Times reported on Thursday, citing EU officials.
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In late May, the UK and the EU agreed on a coordinated ban on insuring ships carrying Russian oil. The EU is expected to introduce the ban in stages within six months, according to media reports.

"They are afraid prices will skyrocket", one of the EU officials told The Financial Times.

The US' concerns are stoked by the fact that the cost of Brent crude oil has already increased by over 20% since late February, while the WTI — by more than 30%.
According to the media outlet, Washington, arguing that this measure may lead to a sharp increase in oil prices worldwide, is calling on the EU authorities to somehow mitigate possible consequences of such a step.
Oil pumpjack in the Republic of Tatarstan, Russia
Last week, Olivier Blanchard, the former chief economist at the International Monetary Fund, said that as a result of the ban, many oil tankers will fail to carry Russian oil, which will potentially lead to a decrease in oil exports from Russia.

"Russia will suffer a loss of revenues, but Europe and the United States will likely suffer from a substantial increase in world oil prices", Blanchard said in a note to the Peterson Institute for International Economics.

Based on this fact, the economist expressed belief that the EU authorities must rethink the step proposed.
On 24 February, Russia began a military operation in Ukraine, responding to calls for help from the breakaway republics of Donetsk and Lugansk. The West and its allies responded by imposing comprehensive sanctions against Russia. Subsequent disruptions in logistical and financial operations have undermined supply chains and led to a spike in oil and gas prices worldwide.
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