Biden is expected to impose a restriction on imports of Russian energy into the United States. According to persons familiar with the situation, the Biden administration will put a ban on U.S. imports of Russian energy on Tuesday without the participation of the United States’ European partners in the process.
Biden is expected to impose a restriction on imports of Russian energy into the United States
According to two persons who spoke on the condition of anonymity, the ban will encompass Russian oil, liquefied natural gas, and coal. According to another source, the decision was reached after consulting with European partners, who rely on Russian energy to a greater extent than the United States.
Because of the sensitivity of the situation, the individuals talked on the condition of anonymity before the announcement. Neither the White House National Security Council nor its spokespeople responded to a request for comment.
The White House declared on Tuesday that President Joe Biden “will announce actions to continue to hold Russia accountable for its unprovoked and unlawful war on Ukraine,” though it did not specify what those sanctions would be or when they would be disclosed. In Washington, he is scheduled to address at 10:45 a.m
As a result of the news, crude oil futures in New York rose 4 percent to $124.21 at 8:19 a.m., extending their gains. The potential of an oil import embargo is helping to push crude prices to their highest levels since the beginning of 2008.
As Congress prepared to act this week in advance of the White House, the White House took the initiative and moved quickly to accelerate the process. As a result, the Biden administration was under increased pressure to move more rapidly.
Because of concerns about the economic impact of sanctions on Russia’s gas and oil, the United States and European countries have so far mostly avoided imposing them on the country’s natural gas and oil. This is particularly true for Europe, which is more reliant on Russian oil and natural gas than the United States. Despite the fact that the Canadian government said last month that it intended to restrict all crude oil imports from Russia, the action was primarily symbolic, given that the country hasn’t imported any since 2019.
According to figures from the United States Energy Information Administration, Russian oil accounted for around 3% of all crude shipments to the United States last year. Overall, imports of Russian oil and petroleum products accounted for around 8% of overall imports into the United States. According to the intelligence firm Kpler, U.S. imports of Russian crude oil in 2022 will grow at the slowest annual rate since 2017.
However, while so-called self-sanctioning has curtailed some purchases of Russian barrels, an outright ban by the United States would further tighten the market and heighten volatility, sending prices skyrocketing even higher.
Nonetheless, the United States is a much smaller buyer than Europe, and a concerted move between the United States and Europe poses the greatest threat to a price rally. For the time being, the market has priced in the majority of the impact of a U.S. ban, which has sent the global benchmark to about $140 a barrel over the weekend and into Monday’s trading session. According to traders, the question now is how long the ban will persist and whether oil from Iran and Venezuela would be able to fill the void.
According to two persons familiar with the discussions, administration officials have privately stated that they should emphasize efforts to accelerate the transition to renewable energy sources and to enhance domestic energy production in the coming years. However, the White House does not intend to launch any new programs.
Administration officials have been meeting with representatives from the United States’ oil and gas industry to discuss how a ban on Russian oil imports might affect American consumers and global energy supplies. This comes as lawmakers from both parties in Washington race to pass legislation prohibiting Russian oil imports as a form of punishment for the Kremlin’s invasion of Ukraine.
Government leaders were already moving to put the administration’s hands in their pockets on the subject. Legislation to prohibit Russian oil imports gained pace quickly on Capitol Hill, with congressional staff revising the text over the weekend and prepared for a House floor vote as soon as Wednesday, according to congressional sources.
In a letter to members of Congress sent on Sunday, House Speaker Nancy Pelosi stated that the House is “exploring robust legislation” that would ban the import of Russian oil and energy products, among other measures, in order to isolate Russia from the global economy. After President Volodymyr Zelenskiy requested that parliamentarians ban the import of Russian oil during a phone call on Saturday, the pressure on lawmakers to take action grew.
Officials from the Biden administration asked Pelosi to hold off on Monday amid growing anxiety that it was politically crucial for the White House to move first, according to two people familiar with the situation. As an added bonus, the administrative approach provides Biden with greater flexibility to change import curbs in the future if tensions lessen or prices rise precipitously.
According to people familiar with the matter, two senior U.S. officials met with members of Venezuelan President Nicolas Maduro’s government in Caracas over the weekend to discuss global oil supplies and the country’s ties to Russia, a sign that the United States is attempting to secure alternative energy sources.
According to the Energy Information Administration, the United States imports around 700,000 barrels per day of Russian crude oil and petroleum products, including fuel oil, from the country.
Included are other petroleum products, such as unfinished fuel oil that may be used to make gasoline and diesel, which accounted for approximately 8% of total oil imports in 2021, but those shipments have also been trending downward in recent months.
If a ban were to be imposed on Europe, which imports approximately 4 million barrels per day of Russian crude and processed products, according to Eurostat data, it would be significantly more difficult to backfill the void.
According to the European Commission, Russia is by far the largest exporter of crude oil to the European Union, accounting for 27 percent of total imports in 2019.