Florence Tan

SINGAPORE (Reuters – Oil prices dropped in Asian early trading Monday, as investors viewed talks at the European Union regarding a Russian oil embargo. The EU is expected to tighten global supplies.

The price of U.S. West Texas Intermediate crude dropped 75 cents (or 0.6%) to $111.72 per barrel at 0002 GMT.

Both contracts rose last week due to supply worries. Last week’s increase was prompted by the European Commission proposing a gradual embargo on Russian oil in its harshest package of sanctions against the conflict in Ukraine. It requires unanimous approval from all EU members.

The Deputy Prime minister of Bulgaria stated late Sunday night that Russia would veto EU sanctions against it if the embargo is not lifted.

According to EU sources, Friday’s proposal by the European Commission to amend its embargo against Russian oil was made to allow Hungary, Slovakia, and Czech Republic to have more time to move their oil supplies.

“The negotiations will continue tomorrow. On Tuesday, the leaders might be required to close them. Our position is clear. Vassilev said that if there is a waiver for certain countries, then we would also like to have one.” Vassilev spoke on national BNT television.

The global financial market is also affected by worries about possible interest rate rises and recession. Also, the potential impact of China’s COVID-19 lockdowns upon its No. 2 economy.

Saudi Arabia is the top-exporter of oil in the world and lowered its crude prices to Asia and Europe on Sunday.