US Bans Russian Oil Imports; Cutting One Of The Major Fueling Arms Of Russian Economy

Striking harder at Putin, on Tuesday, US President Joe Biden called for a ban on oil imports from Russia in retaliation for Putin’s invasion of Ukraine. The huge trade action, responding to Ukraine’s embattled leader, thrust the US out front as Western countries seek to put an end to Putin’s invasion.

Volodymyr Zelenskyy, Ukraine’s President thanked Biden for being able to strike in the heart of Putin’s war machine by placing the ban.

The imports have reportedly been a glaring omission in the recent sanctions placed on Russia due to its invasion on Ukraine. Energy exports have been able to maintain a steady stream of cash flowing to Russia’s economy despite otherwise stringent restrictions on the financial sector.

Biden said that the US was in consultation with its European allies, who are more dependent on energy supplies from Russia and who may not be capable of joining immediately. The declaration marked the most recent attempt of Biden to cut off Russia from much of the world economy and making sure that the latest Ukraine invasion is an incredible strategic loss for Putin, irrespective of whether he manages to capture territory.

The US is a major producer of oil and gas, however, Europe is dependent on imports for 97% of its oil products and 90% of its gas. Russia has been supplying 40% of Europe’s gas and a quarter of its oil. The US doesn’t import natural gas from Russia.

Oil sanctions have resulted in a conflict for the president’s attempts to levy costs on Russia and between political interests at home. Even though Russia’s oil makes up an insignificant part of the US imports, Biden has said that he was pretty reluctant to place a ban on it, cutting into supplies and pushing gasoline prices higher.

Inflation currently is at a 40-year peak, fueled significantly by rising gas prices. This could have an impact as Biden is heading into mid-term elections in November.

Gas prices are on the rise for weeks now owing to the ongoing conflict and also for the expected sanctions on Russia’s energy sector. In the US, the average rate for a gallon of gasoline hit $4.17 Tuesday. This was an increase by 10 cents in a day and up 55 cents from last week, per auto club dubbed AAA.

Biden reportedly said that it was understandable that prices had been rising, but warned the US energy industry against exploiting consumers and excessive price hikes.

Some international energy majors also have also cut off ties to Russian state-owned entities. On Tuesday, oil and gas major, Shell, reported that it would soon be withdrawing from Russia’s oil and gas, beginning with an immediate halt to “spot purchases” of Russia’s crude oil. Shell’s CEO, Ben van Beurden, apologized for purchasing Russian crude last week, saying that his decision was not right amid the war in Ukraine.

Bloomberg first shared the news on Biden’s decision. The White House declaration came despite bipartisan pressure on Capitol Hill to ban Russia’s energy and levy additional economic costs.

On late Tuesday, the House had pushed back a vote on its bill for banning Russia’s oil, amid disagreements among lawmakers. The House was supposed to be voting on the bill on Wednesday, per an aide who’s been granted anonymity for discussing the situation.

The White House said that on Monday Biden spoke to Emmanuel Macron, France’s President, Olaf Scholz, German Chancellor, and Boris Johnson, British PM, and the leaders had affirmed their determination to continue raising the costs on Russia.

Joshua Tucker, a professor at the New York University, informed Al Jazeera that legislators who belong to both major American political parties have been calling on Biden to put increasing pressure on the Russian oil-and-gas sector.

Reference: aljazeera.com