Oil Prices Fall As the EU Seeks to Impose Russia Import Ban

Oil prices opened down in early Asian trade on Tuesday as Hungary resisted European Union plans to implement a ban on Russian oil imports, a move that would constrain the global supply.

At 0004 GMT, Brent crude futures decreased 35 cents, or 0.3%, to $113.89 per barrel, while U.S. West Texas Intermediate (WTI) crude futures decreased 52 cents, or 0.5%, to $113.68 per barrel.

As a result of Russia's invasion of Ukraine, EU foreign ministers were unable to convince Hungary to rescind its veto of a proposed oil embargo against the country on Monday. An embargo requires consent from all EU member states.

On the demand side, China's data revealed that the world's second-largest economy processed 11 percent less crude oil in April than a year earlier due to tight COVID-19 lockdowns, with daily throughput falling to its lowest level since March 2020 as refiners reduced operations in response to weaker demand.

The United States is scaling up production in order to refill stocks that have dwindled as a result of Russia's war on Ukraine, which Moscow refers to as a "special military operation," and the recovery from the coronavirus outbreak.

In June, oil production in the Permian in Texas and New Mexico, the largest U.S. shale oil region, is expected to increase by 88,000 barrels per day (bpd) to a record-breaking 5.219 million bpd, according to a study released by the U.S. Energy Information Administration (EIA) on Monday.

Monday's statistics from the U.S. Department of Energy revealed that the Strategic Petroleum Reserve now contains 538 million barrels, the lowest level since 1987.