Biden to ban US imports of Russian oil in bid to punish Putin
US president Joe Biden is set to announce a ban on imports of Russian oil into the country, according to a White House official, as Washington seeks to ramp up economic sanctions on Moscow over its invasion of Ukraine.
The move follows days of debate within the Biden administration and between the US and western allies about the merits of banning Russian oil to punish Russian president Vladimir Putin for the attack on Ukraine, as well as the danger it could trigger a new shock to global energy markets.
It is likely to raise the pressure on European powers to follow suit, but Germany has thus far led resistance to any prohibition on buying Russian crude on the continent.
A ban on US imports will be far less disruptive to global markets than a full international embargo as only a small proportion of Russian shipments go to the US.
Russia, the world’s largest oil exporter, shipped nearly 8mn barrels a day of crude and petroleum products to global markets at the end of last year, according to the International Energy Agency. About 60 per cent of Russia’s oil exports go to Europe, according to the IEA, while 8 per cent go to the US. China accounts for around 20 per cent.
The White House said Biden would make a statement at 10.45am EST on Tuesday on “actions to continue to hold Russia accountable for its unprovoked and unjustified war on Ukraine”. According to US officials familiar with the move, it would involve other forms of energy imports beyond oil, including coal and liquefied natural gas.
Biden had been facing heavy pressure from members of Congress, both Republicans and Democrats, to plough ahead with an import ban on Russian oil, but had been resisting in a bid to keep energy flowing around the world and prevent petrol prices from rising sharply at home.
Alexander Novak, Russia’s deputy prime minister, warned on Monday night that a potential ban could cause oil prices to more than double to $300 a barrel. He also said Russia had the option of switching off gas supplies to Europe via the original Nord Stream pipeline, but had chosen not to so far because “no one will benefit from it”.
Brent crude oil rose about 5 per cent on Tuesday to around $130 a barrel as traders reacted to signs the US was preparing to announce a ban on Russian imports. West Texas Intermediate, the US benchmark, rose by a similar margin to $125.
On Monday, Olaf Scholz, German chancellor, rejected the idea of a European ban on Russian oil imports, saying he preferred to apply “sustainable” pressure on Moscow that would not impose too big a cost on Germans as energy consumers.
“The German government has been working hard for months with its partners within the EU and beyond to develop alternatives to Russian energy. However, this cannot be done overnight,” Scholz said.
Mohammed Barkindo, secretary-general of the Opec producer group, warned that there would be no way of filling the gap left by Russian oil in case of an all-out embargo.
“There is no capacity in the world at the moment that can replace 7mn barrels of exports,” he said at the CERAWeek energy conference in Houston on Monday.
Oil prices have surged in recent days as many big oil consumers have boycotted Russian oil even before the announcement of any official crude embargoes. Brent and WTI both ended 2021 below $80 a barrel.
