RUSSIA + UKRAINE

US banning Russian oil imports as Biden warns of ‘costs’

Mar 8, 2022, 7:04 AM | Updated: 10:46 am
In this image provided by the White House, President Joe Biden listens during a secure video call w...
In this image provided by the White House, President Joe Biden listens during a secure video call with French President Emmanuel Macron, German Chancellor Olaf Scholz and British Prime Minister Boris Johnson in the Situation Room at the White House Monday, March 7, 2022, in Washington. (Adam Schultz/The White House via AP)
(Adam Schultz/The White House via AP)

WASHINGTON (AP) — President Joe Biden announced Tuesday the U.S. will ban all Russian oil imports, toughening the toll on Russia’s economy in retaliation for its invasion of Ukraine, 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.

Related: Former refugee in Utah helping fellow Marine assist Ukranian refugees

“We will not be part of subsidizing Putin’s war,” Biden declared, calling the new action a “powerful blow” against Russia’s ability to fund the ongoing offensive.

He warned that Americans will see rising prices, saying, “Defending freedom is going to cost.”

Related: Gas prices will get worse, Utah congressman warns

Biden said the U.S. was acting in close consultation with European allies, who are more dependent on Russian energy supplies. The European Union this week will commit 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’s 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, 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 Biden heading into the November midterm elections. He said two weeks ago that he wanted “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 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.

Biden said it was understandable that prices were rising, but cautioned the U.S. energy industry against “excessive price increases” 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 pledged to halt further purchases of Russian energy supplies. 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 — a one-year increase of 24%, according to the U.S. Energy Information Administration.

“It’s an important step to show Russia that energy is on the table,” said Max Bergmann, a former State Department official who is now a senior fellow at the Democratic-leaning Center for American Progress.

Bergmann said it wasn’t surprising that the U.S. was able to take this step before European nations, which are more dependent on Russian energy.

“All of this is being done in coordination, even if the steps are not symmetrical,” he said. “We are talking to them constantly.”

The news of Biden’s 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, “Ban it.”

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 Biden had made his decision.

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.

“The United States economy can fully handle any of the challenges associated with higher oil prices,” Jason Furman, a Harvard professor and former top economic adviser to President Barack Obama. “But it will bring some challenges. We’re going to have higher prices at the pump, and there’s no way around that.”

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 U.S. 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 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’s no other way to meet the European Union’s 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.

“They 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.”

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 Biden administration from seeking any oil import deal from the Nicolas Maduro regime in Venezuela.

“The Biden administration’s 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,” said Sen. Bob Menendez, D-N.J., the chairman of the Foreign Relations Committee, in a statement late Monday. “The 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.”

 

President Joe Biden has decided to ban Russian oil imports, toughening the toll on Russia’s economy in retaliation for its invasion of Ukraine, according to a person familiar with the matter.

The move follows pleas by Ukrainian President Volodmyr Zelenskyy to U.S. and Western officials to cut off the imports, which had been a glaring omission 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.

Biden was set to announce the move as soon as Tuesday, the person said, speaking on the condition of anonymity to discuss the matter before an announcement. The White House said Biden would speak Tuesday morning to announce “actions to continue to hold Russia accountable for its unprovoked and unjustified war on Ukraine.”

The U.S. will be acting alone, but in close consultation with European allies, who are more dependent on Russian energy supplies. Natural gas from Russia accounts for one-third of Europe’s consumption of the fossil fuel. The U.S. 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.”

The news of his 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.

The U.S. 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 U.S. 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 U.S. 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 U.S. officials say is key to confronting Putin.

Today’s Top Stories

Russia + Ukraine

Russian-backed military officials have said Ukrainian forces are weakening the Kremlin's offensive ...
Julia Kesaieva, Vasco Cotovio, Tim Lister and Sana Noor Haq

Wave of Russian missiles hit Ukraine after Zelensky outlines conditions for peace at G20 summit

The strikes targeted power infrastructure in several regions of the country, leaving more than seven million Ukrainians without power.
12 days ago
An old woman walks in the Kherson region village of Arkhanhelske on Nov. 3, 2022, which was formerl...
Tim Lister, Darya Tarasova and Rob Picheta, CNN

Russia will withdraw forces from Kherson in Ukraine war setback

Russia is retreating from the city of Kherson. It's the only regional capital it has taken since the February invasion. It's war setback for Russian President Vladimir Putin.
17 days ago
Russian-backed military officials have said Ukrainian forces are weakening the Kremlin's offensive ...
Tim Lister, Josh Pennington, Anna Chernova, Uliana Pavlova, Yulia Kesaieva and Sana Noor Haq, CNN

Russian troops slam generals over ‘incomprehensible battle’ that reportedly killed 300 in Donetsk

Russian troops are saying they are facing a incomprehensible battle after suffering heavy losses during an intense fight in eastern Ukraine.
18 days ago
Ukraine's President Volodymyr Zelenskiy visits the Memory Wall of Fallen Defenders of Ukraine, amid...
Natasha Bertrand, Kylie Atwood and Oren Liebermann, CNN

US officials urge Ukraine to signal it is still open to diplomatic discussions with Russia

In recent weeks, the US has been encouraging Ukraine to let Russia know it is open to diplomatic discussions.
19 days ago
An abandoned car in a southern Ukrainian village formerly occupied by Russian forces is marked with...
Mick Krever, Clarissa Ward and Scott McWhinnie, CNN

In newly liberated villages, Ukrainian investigators uncover horrific claims of Russian sexual violence

Claims of sexual violence by Russian military is being uncovered by Ukrainian investigators.
24 days ago
Smoke rises on the outskirts of Kyiv during a Russian missile attack on Oct. 31. Photo credit: Gleb...
Kostan Nechyporenko, Olga Voitovych, Victoria Butenko and Lianne Kolirin, CNN

Russian missiles bombard cities across Ukraine, hitting power and water infrastructure

President Putin said Monday the onslaught was "partly" a response to an attack on Russia's fleet in the Crimean city of Sevastopol on Saturday.
26 days ago

Sponsored Articles

Happy joyful smiling casual satisfied woman learning and communicates in sign language online using...
Sorenson

The best tools for Deaf and hard-of-hearing workplace success

Here are some of the best resources to make your workplace work better for Deaf and hard-of-hearing employees.
Team supporters celebrating at a tailgate party...
Macey's

8 Delicious Tailgate Foods That Require Zero Prep Work

In a hurry? These 8 tailgate foods take zero prep work, so you can fuel up and get back to what matters most: getting hyped for your favorite
christmas decorations candles in glass jars with fir on a old wooden table...
Western Nut Company

12 Mason Jar Gift Ideas for the 12 Days of Christmas [with recipes!]

There are so many clever mason jar gift ideas to give something thoughtful to your neighbors or friends. Read our 12 ideas to make your own!
wide shot of Bear Lake with a person on a stand up paddle board...

Pack your bags! Extended stays at Bear Lake await you

Work from here! Read our tips to prepare for your extended stay, whether at Bear Lake or somewhere else nearby.
young boy with hearing aid...
Sorenson

Accommodations for students who are deaf and hard of hearing

These different types of accommodations for students who are deaf and hard of hearing can help them succeed in school.
Young woman receiving laser treatment...
Form Derm Spa

How facial plastic surgery and skincare are joining forces

Facial plastic surgery is not only about looking good but about feeling good too. The medical team at Form Spa are trained to help you reach your aesthetic outcomes through surgery and through skincare and dermatology, too.
US banning Russian oil imports as Biden warns of ‘costs’