Despite high gas prices, US bans Russian oil over Ukraine war
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| Washington
President Joe Biden announced Tuesday the United States will ban all聽Russian oil imports, toughening the toll on Russia鈥檚 economy in retaliation for聽its invasion of Ukraine,聽but he acknowledged it will bring costs to Americans, particularly at the gas pump.
The action follows pleas by Ukrainian President Volodymyr Zelenskyy to U.S. and Western officials to cut off the imports, which had been a glaring omission in the massive sanctions put in place on Russia over the invasion. Energy exports have kept a steady stream of cash flowing to Russia despite otherwise severe restrictions on its financial sector.
鈥淲e will not be part of subsidizing Putin鈥檚 war,鈥 Mr. Biden declared, calling the new action a 鈥減owerful blow鈥 against Russia鈥檚 ability to fund the ongoing offensive.
He warned that Americans will see rising prices, saying, 鈥淒efending freedom is going to cost.鈥
Mr. Biden said the U.S. was acting in close consultation with European allies, who are more dependent on Russian energy supplies. The European Union聽this week will commit聽to phasing out its reliance on Russia for energy needs as soon as possible, but filling the void without crippling EU economies will likely take some time.
Unlike the US, which is a major oil and gas producer, Europe relies on imports for 90% of its gas and 97% of its oil products. Russia supplies 40% of Europe鈥檚 gas and a quarter of its oil. The U.S. does not import Russian natural gas.
The issue of oil sanctions has created a conflict for the president between political interests at home and efforts to impose costs on Russia. Though Russian oil makes up only a small part of U.S. imports, Mr. Biden has said he was reluctant to ban it, cutting into supplies here and pushing gasoline prices higher.
Inflation is at a 40-year peak, fueled in large part by gas prices, and that could hurt Mr. Biden heading into the November midterm elections. He said two weeks ago that he wanted 鈥渢o limit the pain the American people are feeling at the gas pump.鈥
Gas prices have been rising for weeks due to the conflict and in anticipation of potential sanctions on the Russian energy sector. The average price for a gallon of gasoline in the U.S. hit a record $4.17 Tuesday, rising by 10 cents in one day, and up 55 cents since last week, according to auto club AAA.
Mr. Biden said it was understandable that prices were rising, but cautioned the U.S. energy industry against 鈥渆xcessive price increases鈥 and exploiting consumers.
Even before the U.S. ban many Western energy companies including ExxonMobil and BP moved to cut ties with the Russia and limit imports. Shell, which purchased a shipment of Russian oil this weekend, apologized for the move on Tuesday amid international criticism and聽pledged to halt further purchases of Russian energy supplies.聽Preliminary data from the U.S. Energy Department shows imports of Russian crude dropped to zero in the last week in February.
In 2021, the U.S. imported roughly 245 million barrels of crude oil and petroleum products from Russia 鈥 a one-year increase of 24%, according to the U.S. Energy Information Administration.
鈥淚t鈥檚 an important step to show Russia that energy is on the table,鈥 said Max Bergmann, a former State Department official who is now a senior fellow at the Democratic-leaning Center for American Progress.
Mr. Bergmann said it wasn鈥檛 surprising that the U.S. was able to take this step before European nations, which are more dependent on Russian energy.
鈥淎ll of this is being done in coordination, even if the steps are not symmetrical,鈥 he said. 鈥淲e are talking to them constantly.鈥
The news of Mr. Biden鈥檚 decision Tuesday was first reported by Bloomberg.
The White House announcement comes amid bipartisan pressure on Capitol Hill to ban Russian energy and impose other economic costs.
Last week, House Speaker Nancy Pelosi gave a big boost when she declared, 鈥淏an it.鈥
On Monday, Democrats on the powerful Ways & Means Committee posted, then removed, an announcement on a bipartisan bill to ban Russian oil imports and slap further trade sanctions on the country, according to an aide, because of pushback from the White House to acting before Mr. Biden had made his decision.
Ms. Pelosi told Democrats in a meeting early Tuesday that the House would go forward with a vote on legislation to ban the Russian oil imports, according to a person granted anonymity to discuss the private caucus meeting.
鈥淭he United States economy can fully handle any of the challenges associated with higher oil prices,鈥 Jason Furman, a Harvard professor and former top economic adviser to President Barack Obama. 鈥淏ut it will bring some challenges. We鈥檙e going to have higher prices at the pump, and there鈥檚 no way around that.鈥
Before the invasion, Russian oil and gas made up more than a third of government revenues. Global energy prices have surged after the invasion and have continued to rise despite coordinated releases of strategic reserves, making Russian exports even more lucrative.
As a consequence of Russia鈥檚 invasion of Ukraine, the U.S. and international partners have sanctioned Russia鈥檚 largest banks, its central bank and finance ministry, and moved to block certain financial institutions from the SWIFT messaging system for international payments.
But the rules issued by the Treasury Department allow Russian energy transactions to keep going through non-sanctioned banks that are not based in the U.S. in an effort to minimize any disruptions to the global energy markets.
German Chancellor Olaf Scholz has said he opposes a European ban on Russian energy imports and that there鈥檚 no other way to meet the European Union鈥檚 needs for motor fuel, heat and electricity, and industrial use. Vice Chancellor Robert Habeck said Tuesday that when he visited Washington last week, U.S. officials acknowledged Europe was in a different situation.
鈥淭hey told me in the talks that they will neither demand nor ask that Germany do the same. But I would extrapolate from that for us, and for me, that we need as soon as possible to create the possibility to take similar measures.鈥
While Russian oil makes up a small amount of overall U.S. energy imports, the U.S. could replace Russian crude with imports from other oil-rich nations, but that could prove politically problematic.
Key U.S. senators are warning the Mr. Biden administration from seeking any oil import deal from the Nicolas Maduro regime in Venezuela.
鈥淭he Biden administration鈥檚 efforts to unify the entire world against a murderous tyrant in Moscow should not be undercut by propping up a dictator under investigation for crimes against humanity in Caracas,鈥 said Sen. Bob Menendez, D-N.J., the chairman of the Foreign Relations Committee, in a statement late Monday. 鈥淭he democratic aspirations of the Venezuelan people, much like the resolve and courage of the people of Ukraine, are worth much more than a few thousand barrels of oil.鈥
This story was reported by the Associated Press.
Editor鈥檚 note: Check out the Monitor鈥檚 comprehensive Ukraine coverage from correspondents in Ukraine, Europe, the United States, and beyond on our Ukraine page.