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.

Russia + Ukraine

FILE - In this photo  provided by the Russian Defense Ministry Press Service, Russian missile cruis...
The Associated Press

Sailors’ families seek answers about Russian ship sinking

Families of Russian sailors aboard the Moskva are seeking information about the ship sinking.
4 months ago
President Joe Biden walks to board Air Force One, Thursday, April 21, 2022, at Andrews Air Force Ba...
The Associated Press

Biden announces heavy artillery, other weapons for Ukraine

President Joe Biden announced another $1,3 billion in military aide for Ukraine.
4 months ago
Ukrainian soldiers walk on a destroyed bridge in Irpin, on the outskirts of Kyiv, on Wednesday, Apr...
The Associated Press

‘Days or hours left’: Russia tightens the noose in Mariupol

Russian forces tighten their grip in the Ukrainian city of Mariupol.
4 months ago
A Ukrainian soldier inspects a Russian tank after recent battles at the village of Moshchun close t...
The Associated Press

Russia pours in more troops and presses attack in the east

Russia poured additional troops into the eastern half of Ukraine in a potential battle for that part of the country.
4 months ago
Russian military vehicles move on a highway in an area controlled by Russian-backed separatist forc...
The Associated Press

Zelenskyy: Russian offensive in eastern Ukraine has begun

Russia began its full-scale ground offensive to take control of eastern Ukraine on Monday.
4 months ago
Relatives mourn the dead of Oleksandr Mozheiko, 31, territorial defense soldier who was killed by R...
The Associated Press

Police: More than 900 civilian bodies found in Kyiv region

More than 900 civilian bodies have been found in an area surrounding the Ukrainian capital after Russia's withdrawal
4 months ago

Sponsored Articles

Prescription opioid...
Know Your Script

Prescription opioid misuse | How to protect your family from the opioid epidemic

Studies have shown that prescription opioid misuse has increased since COVID-19. So what do you need to know about these opioids?
...

Tax Tuesday: The Most Common Mistakes People Make When Filing Their Taxes

Fortunately, for most average earners, they will not end up owing overpayments received for the Child Tax Credit in 2021.
...

Tax Tuesday: How will last year’s child tax credits affect you?

Fortunately, for most average earners, they will not end up owing overpayments received for the Child Tax Credit in 2021.
...

Tax Tuesday: Key Information Before the Filing Deadline

Businesses can receive a credit of up to $5,000 per employee in 2020 and up to $21,000 per employee in 2021.
national heart month...
Intermountain Healthcare

National Heart Month: 5 Lifestyle Changes to Make Today to Keep You Heart Healthy

Heart disease is the leading cause of death for both men and women. One person dies every 36 seconds in the United States from cardiovascular disease
Joseph Smith Memorial Building...
Temple Square

The Joseph Smith Memorial Building is an icon of Salt Lake City | Why hosting an event at this beautiful location will make you a hero this year

Here's why hosting an event at the iconic Joseph Smith Memorial Building in downtown Salt Lake City will make you a hero this year.
US banning Russian oil imports as Biden warns of ‘costs’