Ukraine crisis: President Joe Biden announces ban on Russian oil imports

File photo of US president Joe Biden. AP

President Joe Biden announced a ban on US imports of Russian oil on Tuesday, in the administration’s most far-reaching action yet to punish Moscow for invading Ukraine.

“We’re banning all imports of Russian oil and gas and energy. That means Russian oil will no longer be acceptable at US ports and the American people will deal another powerful blow to (President Vladimir) Putin,” Biden said in an address from the White House, adding that the decision was taken “in close consultation” with allies.

The ban came with Democrats threatening legislation to force Biden’s hand, despite the likely impact on already soaring gas prices.

The move follows pleas by Ukrainian president Volodymyr Zelenskyy to US 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 influx of cash flowing to Russia despite otherwise severe restrictions on its financial sector.

The US will be acting alone, but in close consultation with European allies, who are more dependent on Russian energy supplies. European nations have said they plan to reduce their reliance on Russia for their energy needs, but filling the void without crippling their economies will likely take some time. Natural gas from Russia accounts for one-third of Europe’s consumption of the fossil fuel. The US does not import Russian natural gas.

Biden had explained his reluctance to impose energy sanctions at the outset of the conflict two weeks ago, saying that he was trying “to limit the pain the American people are feeling at the gas pump.”

Gas prices have been rising for weeks due to the conflict and in anticipation of potential sanctions on the Russian energy sector. The US national average for a gallon of gasoline soared 45 cents a gallon in the past week and topped $4.06 on Monday, according to auto club AAA.

The United States generally imports about 100,000 barrels a day from Russia, only about 5 per cent of Russia’s crude oil exports, according to Rystad Energy. Last year, roughly 8 per cent of US imports of oil and petroleum products came from Russia.

Even before the US 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 pledged to halt further purchases of Russian energy supplies. Preliminary data from the energy department shows imports of Russian crude dropped to zero in the last week in February.

The news of Biden’s decision Tuesday was first reported by Bloomberg.

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’s invasion of Ukraine, the US and international partners have sanctioned Russia’s 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 US in an effort to minimize any disruptions to the global energy markets.

Inflation, at a 40-year peak and fueled in large part by gas prices, has hurt Biden politically with voters heading into the November elections.

The sanctions created a possible trade-off for the president between his political interests at home and abroad. By invading Ukraine, Russia has potentially fed into the supply chain problems and inflation that have been a crucial weakness for Biden, who now is trying to strike a balance between penalizing Putin and sparing American voters.

Biden specifically highlighted the Russian energy carve-outs as a virtue because they would help to protect US families and businesses from higher prices.

“Our sanctions package we specifically designed to allow energy payments to continue,” he said.

Restricting the world’s largest exporter of natural gas and second-largest exporter of oil, after Saudi Arabia, could hurt the unity that US officials say is key to confronting Putin.

With inputs from agencies

Read all the Latest News, Trending News, Cricket News, Bollywood News,
India News and Entertainment News here. Follow us on Facebook, Twitter and Instagram.