On Tuesday, President Joe Biden announced that the U.S. would ban all Russian oil, natural gas, and coal imports from entering the country. The action is a direct response to Russia’s invasion of Ukraine, which the president said targets the “main artery of Russia’s economy.”
During a press conference this afternoon, President Biden opened up about the decision to ban the Russian imports. Ukrainian President Volodymyr Zelensky recently requested the ban among other forms of assistance during a video call with U.S. lawmakers this weekend. Biden acknowledged that both Democrats and Republicans are united in the retaliatory move against Russia.
“That mean’s Russian oil will no longer be acceptable at U.S. ports. And the American people will deal another powerful blow to Putin’s war machine,” Biden said during the announcement.
What You Need To Know
- President Biden has announced bans on Russian imports including oil, natural gas, and coal imports.
- The ban is a response to Russia’s attacks on Ukraine as the war continues in Eastern Europe.
- U.S. lawmakers are united in the decision that Biden called a “powerful blow to Putin’s war machine.”
- The president admitted that gas prices are expected to rise because of the ban.
- Officials are releasing 60 million barrels from joint oil reserves to help combat the price hikes.
- “Republicans and Democrats alike are clear we must do this,” Biden said.
President Biden Warns Russian Oil Ban Will Cause Domestic Gas Price Hikes
While speaking earlier today, President Biden admitted that the White House’s decision to ban Russian oil imports will cause domestic gas prices to rise even higher. However, he warned oil companies against taking advantage of the supply shortage saying it’s “no time for profiteering or price gouging.”
Even before the added sanctions, gas prices have increased for weeks due to the Ukraine conflict. The national average per gallon shot up 45 cents in just the past week. Previous to the U.S. sanctions, Western energy companies like ExxonMobil and BP severed ties with Russia and limited imports.
In contrast, rival company Shell bought a shipment of Russian oil this weekend, which brought international criticism. Shell apologized for the purchase on Tuesday and promised to stop any additional energy supply purchases from Russia. In America, the U.S. Energy Department revealed that Russian oil imports have dropped to zero as of the last week of February. Yet President Biden has warned that the ban will increase prices even more.
“The decision today is not without cost here at home,” President Biden told reporters. “Putin’s war is already hurting American families at the gas pump. Since Putin began his military buildup on Ukrainian borders – just since then – the price of gas at pumps in America went up 75 cents. And with this action it’s going to go up further.”
Biden swore to do everything he could to minimize the gas price hikes in the U.S. following the Russian oil ban. That includes the government releasing 60 million barrels from allied joint oil reserves.
“I said defending freedom is going to cost,” Biden added. “It’s going to cost us as well in the United States. Republicans and Democrats understand that alike. Republicans and Democrats alike are clear we must do this.”
Biden Reluctant At First To Impose Sanctions On Energy Supplies
The U.S. and other allies had already placed massive sanctions on Russia over the Ukraine invasion. Yet energy-based imports were a glaring omission from original sanctions. While Russia took heavy losses due to sanctions on their financial sector, their energy exports kept money pouring into the country.
The most recent ban sees the U.S. acting alone but in close consultation with our European allies. Many other countries are more reliant on Russian energy supplies that the U.S. But the European Union has committed to phasing out their dependence on Russian oil as soon as possible. As of now, Russia provides one-third of Europe’s natural gas supplies. America does not import Russian natural gas at all.
Talks of a Russian oil ban in recent weeks have created a conflict of interests for the Biden administration. He’s had to weigh political interests at home with imposing sanctions on Russia as the administration looks to support Ukraine. Russian oil only makes up a small percentage of U.S. imports, but President Biden hesitated to ban it at first. He knew it would cut into supplies and increase gas prices even higher domestically. Yet bipartisan pressure to ban Russian energy supplies pushed the president to act this week.
In 2021, America imported around 245 million barrels of Russian oil and petroleum products, according to the U.S. Energy Information Administration. Further, increased gas prices have driven inflation to a 40-year peak. It’s a slippery slope as the Biden administration navigates the Ukraine crisis and the November midterm elections.
Oil Sanctions Hit Russia’s Largest, Highest-Earning Export
Previous to the Ukraine invasion, Russian oil and gas accounted for more than a third of the government’s revenues. In 2019, the Natural Resources and Environment Ministry estimated it to be roughly 40% of their federal budget. In addition, oil and gas accounted for 60% of their exports that year. Since the invasion, global energy prices have skyrocketed and continue to rise despite releasing joint oil reserves. Therefore the Russian energy exports are even more lucrative now.
Even before today’s oil ban, America and its international partners sanctioned Russia’s largest banks. They also sanctioned Russia’s central bank and finance ministry while blocking international payments through certain financial institutions. The Treasury Department implemented rules that still allow Russian energy transactions through non-sanctioned banks that aren’t in the U.S. The department wants to minimize any disruptions to the global energy markets. In fact, President Biden touched on the importance of those exceptions saying they would help protect American families and businesses from rising costs.
“Our sanctions package we specifically designed to allow energy payments to continue,” Biden shared.
Russian oil only makes up around 8% of all U.S. imported oil and petroleum. While it’s only a small amount of America’s overall energy imports, if need be, the U.S. may choose to replace the supply from other oil-rich nations. However, many worry that could become politically problematic as well. For example, lawmakers have already warned the Biden administration from signing off on any oil import deal from the Nicolas Maduro regime in Venezuela. All things considered, President Biden may have his hands tied, so Americans might have to simply ride out the Russia-Ukraine war along with its higher gas prices.