President Joe Biden took a harsher line against Russia’s economy on Tuesday, ordering a ban on Russian oil imports in retribution for Vladimir Putin’s aggression in Ukraine. The huge trade move came in response to Ukraine’s embattled leader’s pleas, but the United States is in the lead as Western nations fight to stop Putin’s incursion.
The pain will be felt by Americans as well – at the petrol pump. — Biden acknowledged the expense of defending freedom, saying, “Defending freedom is going to cost.”
The shipments were a striking omission from the enormous sanctions imposed on Russia in response to the invasion. Despite other severe constraints on Russia’s banking system, energy exports have maintained a constant flow of cash coming.
“We will not contribute to Putin’s war,” Biden said, describing the new move as a “powerful blow” to Russia’s capacity to pay the ongoing offensive.
Biden stated that the US was working closely with European partners, who are more reliant on the Russian energy supply and may not be able to participate right now. The announcement represented Biden’s latest attempt to cut Russia off from much of the global economy, guaranteeing that Putin’s invasion of Ukraine is a strategic failure, even if he succeeds in seizing land.
“Putin will never win in Ukraine,” Biden stated.
“Thankful for US and @POTUS personal leadership in striking at the heart of Putin’s war machine and banning oil, gas, and coal from US market,” Ukrainian President Volodymyr Zelensky said in a tweet. Encourage other nations and leaders to do the same.”
The European Union will pledge this week to reduce its dependency on Russia for energy as quickly as possible, but filling the hole without damaging EU economies will take time. The United Kingdom, which is no longer a member of the European Union, declared on Tuesday that Russian oil and oil products will be phased out by the end of the year.
Unlike the United States, which is a major producer of oil and gas, Europe imports 90 percent of its gas and 97 percent of its oil products. Russia provides 40% of Europe’s natural gas and a fifth of its oil. Russian natural gas is not imported into the United States.
For the president, the subject of oil sanctions has created tension between domestic political goals and measures to inflict costs on Russia. Despite the fact that Russian oil accounts for a minor percentage of U.S. imports, Biden has stated that he is hesitant to impose an embargo since it would reduce supplies and raise fuel costs.
Inflation is at a 40-year high, spurred in large part by rising gas prices, which might affect Biden as the midterm elections approach in November.
“Putin’s war is already hitting American families at the petrol pump,” Biden said, adding, “I’m going to do everything I can here at home to reduce Putin’s price spike.”
Gas prices have been climbing for weeks as a result of the conflict and the threat of sanctions against Russia’s energy sector. According to AAA, the average price of a gallon of gasoline in the United States touched a new high of $4.17 on Tuesday, up 10 cents in one day and 55 cents since last week.
Biden acknowledged that costs are growing, but warned the US energy business against “excessive price rises” and customer exploitation.
Many Western oil corporations, notably ExxonMobil and BP, broke connections with Russia and limited imports even before the US ban. Shell, which bought a supply of Russian oil over the weekend, apologized for the move on Tuesday in the face of international condemnation and promised to stop buying Russian energy supplies in the future. According to preliminary figures from the US Energy Department, Russian crude imports fell to zero in the last week of February.
According to the US Energy Information Administration, the US purchased around 245 million barrels of crude oil and petroleum products from Russia in 2021, a 24 percent increase over the previous year.
“It’s a significant step toward demonstrating to Russia that energy is on the table,” said Max Bergmann, a former State Department official who now works as a senior fellow at the Democratic-leaning Center for American Progress.
It’s not unexpected, according to Bergmann, that the United States was able to take this step ahead of Europe, which is more reliant on Russian energy.
“Even if the steps aren’t symmetrical, everything is done in coordination,” he remarked. “We’re always chatting to them.”
The embargo on new acquisitions took effect immediately, according to the White House, although there was a 45-day “wind-down” period for current contracts to be delivered.
The announcement by the White House comes despite bipartisan pressure on Capitol Hill to prohibit Russian energy and impose other economic penalties.
House Speaker Nancy Pelosi offered a major boost last week when she proclaimed, “Ban it.”
According to an aide, Democrats on the influential Ways & Means Committee posted, and then withdrew, an announcement on a bipartisan bill to prohibit Russian oil imports and impose more trade restrictions on the country on Monday due to White House pressure against acting before Biden made his decision.
Sen. John Barrasso, R-Wyo., a member of the party leadership, said Tuesday, “President Biden is finally doing what members of Congress have been advocating for all along.” “His decision to impose a ban on Russian oil is a necessary step towards suffocating Putin’s cash cow.”
“The United States economy can completely handle all of the obstacles associated with rising oil prices,” said Jason Furman, a Harvard professor and former economic adviser to President Barack Obama. However, it will provide some difficulties. We’re going to have increased gas prices, and there’s no getting around it.”
Pelosi said the House would vote on measures banning Russian oil imports, imposing trade tariffs on Russia, and expanding sanctions authority on Russians responsible for assaults on civilians in Ukraine.
Late Tuesday, however, the House postponed a vote on the bill due to differences among lawmakers over details. According to an aide who requested anonymity to discuss the matter, the bill was due to be voted on by the House on Wednesday.
Russian oil and gas accounted for more than a third of government revenue prior to the invasion. After the invasion, global energy prices soared, and they have continued to increase despite coordinated releases of strategic reserves, making Russian exports even more profitable.
As a result of Russia’s invasion of Ukraine, the United States and its international partners have sanctioned Russia’s main banks, central bank, and finance ministry, as well as tried to restrict specific financial institutions from using the SWIFT international payment messaging system.
However, the Treasury Department’s rules allow Russian energy transactions to continue to be processed through non-US sanctioned institutions in order to avoid any disruptions to global energy markets.
German Chancellor Olaf Scholz has stated that he opposes a European Union embargo on Russian energy imports, claiming that there is no alternative way to meet the EU’s needs for motor fuel, heat and power, and industrial use. Vice-Chancellor Robert Habeck said on Tuesday that when he visited Washington last week, American authorities understood that Europe was in a unique situation.
“During the conversations, they promised me that they will not expect or ask Germany to do the same.” But I would infer from it for us, and for me, that we need to create the prospect of taking such actions as quickly as feasible.”
While Russian oil accounts for a modest percentage of total US energy imports, the US might replace it with crude from other oil-rich countries, but this could be politically difficult.
Senators from both parties are advising the Biden administration against negotiating an oil import deal with Venezuela’s Nicolas Maduro regime.
“The Biden administration’s efforts to unite the entire world against a murderous tyrant in Moscow should not be undermined by supporting a dictator in Caracas who is under investigation for crimes against humanity,” said Sen. Bob Menendez, D-N.J., chairman of the Foreign Relations Committee, in a statement released late Monday. “The Venezuelan people’s democratic ambitions, like the Ukrainian people’s fortitude and courage, are worth far more than a few thousand barrels of oil.”
