US banning Russian oil imports as President Biden warns of ‘costs’ at gas pumps

WASHINGTON (Reuters) – President Joe Biden on Tuesday ordered a ban on Russian oil imports in retaliation for Vladimir Putin’s attack on Ukraine. The big trade deal, in response to calls from Ukraine’s fighting leader, has pushed the United States to the forefront as Western nations try to stop Putin’s invasion.

Americans will also feel pain – at the gas pump – Biden acknowledged, “Defending freedom will cost.”

The imports were a blatant omission in the massive sanctions imposed on Russia over the invasion. Energy exports have maintained a steady stream of cash flows to Russia despite otherwise severe financial constraints.

“We will not be part of the subsidy for Putin’s war,” Biden said, calling the new move a “strong blow” to Russia’s ability to fund an ongoing offensive.

Biden said the United States is working closely with its European allies, who are more dependent on Russian energy supplies and who, he acknowledged, may not be able to join immediately. The announcement marked Biden’s latest attempt to cut Russia off from much of the world economy and ensure that the invasion of Ukraine is a strategic loss for Putin, even if he manages to seize territory.

“Ukraine will never be a victory for Putin,” Biden said.

In a tweet, Ukrainian President Volodymyr Zelenskyy praised Biden’s action: “Thanks to the personal leadership of the United States and @POTUS for beating the heart of Putin’s war machine and banning oil, gas and coal from the market. of the USA. “Encourage other countries and leaders to follow.”

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The European Union will commit this week to phasing out its dependence on Russia for energy as soon as possible, but bridging the gap without crippling EU economies is likely to take some time. The United Kingdom, which is no longer part of the EU, announced on Tuesday that oil and petroleum products from Russia would be phased out by the end of the year.

Unlike the US, which is a major producer of oil and gas, 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 United States does not import Russian gas.

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The issue of oil sanctions has created a conflict for the president between domestic political interests and cost-cutting efforts in Russia. Although Russian oil is only a small part of US imports, Biden said he was reluctant to ban it, cutting supplies here and pushing gasoline prices higher.

Inflation is at a 40-year high, largely fueled by gas prices, and that could hurt Biden in the November midterm elections.

“Putin’s war is already hurting American families at the gas station,” Biden said, adding: “I will do everything I can to minimize the rise in Putin’s house prices here.”

Gas prices have been rising for weeks due to the conflict and pending possible sanctions on Russia’s energy sector. The average price for a gallon of gasoline in the US reached a record $ 4.17 on Tuesday, up 10 cents in one day and up 55 cents from last week, according to the auto club AAA.

Biden said it was understandable that prices were rising, but warned the US energy industry against “excessive price increases” and consumer exploitation.

Even before the US embargo, many Western energy companies, including ExxonMobil and BP, moved to sever ties with Russia and restrict imports. Shell, which bought a shipment of Russian oil this weekend, apologized for moving Tuesday amid international criticism and vowed to halt further purchases of Russian energy supplies. Preliminary data from the US Department of Energy show that Russian crude imports fell to zero in the last week of February.

In 2021, the US imported about 245 million barrels of crude oil and petroleum products from Russia – an annual increase of 24%, according to the US Energy Information Administration.

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

Bergman said it was not surprising that the United States was able to take this step before European nations, which are more dependent on Russian energy.

“All this is done in a coordinated way, even if the steps are not symmetrical,” he said. “We talk to them all the time.”

The White House said the ban on new purchases took effect immediately, but the government allowed a 45-day “wind” to continue delivery under existing contracts.

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

The White House announcement comes amid bipartisan pressure on the Capitol to ban Russian energy and impose other financial costs.

Last week, Parliament Speaker Nancy Pelosi gave a big boost when she said “Ban it”.

On Monday, Democrats in the powerful Ways & Media Committee released, and then removed, a statement on a bipartisan bill to ban Russian oil imports and impose further trade sanctions on the country, according to an aide, prompted by the White House against the action before Biden made his decision.

“President Biden is finally doing what members of Congress have been pushing for a long time,” Sen. John Barrasso, R-Wyo, a member of the party leadership, said Tuesday. “His decision to ban Russian oil is a very necessary step to kill Putin’s cow.”

Jason Furman, a Harvard professor and former economic adviser to President Barack Obama, said: “The US economy can fully meet any of the challenges associated with higher oil prices. But it will bring some challenges. We will have higher prices. in the pump, and there is no way to bypass it “.

Pelosi said Parliament would vote on Tuesday on legislation banning Russian oil imports, imposing trade costs on Russia and extending sanctions against Russians for attacking civilians in Ukraine.

But late Tuesday, Parliament withdrew its vote on the bill amid disagreements among lawmakers over details. Parliament was expected to vote on the bill Wednesday, according to an aide who was given anonymity to discuss the situation.

Prior to the invasion, Russian oil and gas accounted for more than a third of state revenues. World energy prices have risen since the invasion and have continued to rise despite coordinated releases of strategic stocks, making Russian exports even more lucrative.

As a result of Russia’s invasion of Ukraine, the United States and its international partners have imposed sanctions on Russia’s largest banks, its central bank and the Treasury Department, and excluded some financial institutions from the SWIFT messaging system for international payments.

However, the rules issued by the Ministry of Finance allow Russian energy transactions to continue to be carried out through non-sanctioned banks not located in the US, in an effort to minimize disruptions in global energy markets.

German Chancellor Olaf Solz has said he opposes a European ban on Russian energy imports and that there is no other way to meet the European Union’s needs for motor fuel, heat and electricity and industrial use. Vice Chancellor Robert Hubbock said Tuesday that when he visited Washington last week, US officials acknowledged that Europe was in a different situation.

“I was told in the talks that they would neither demand nor ask Germany to do the same. But that would make it easier for us and for us to make it possible for us to take similar action as soon as possible.”

While Russian oil accounts for a small amount of total US energy imports, the US could replace Russian crude with imports from other oil-rich countries, but this could prove politically problematic.

Top US senators warn Biden’s government not to pursue any oil import deal with Venezuela’s Nicolas Maduro regime.

“The Biden administration’s efforts to unite the world against a murderous tyrant in Moscow must not be undermined by the support of a dictator under investigation for crimes against humanity in Caracas,” said Sen. Bob Menendez, DN.J. chairman of the Foreign Affairs Committee, in a statement late Monday. “The democratic aspirations of the people of Venezuela, as well as the determination and courage of the people of Ukraine, are worth far more than a few thousand barrels of oil.”


AP authors Matthew Daly, Lisa Mascaro and Chris Megerian contributed.

Copyright © 2022 by the Associated Press. All rights reserved.

US banning Russian oil imports as President Biden warns of ‘costs’ at gas pumps Source link US banning Russian oil imports as President Biden warns of ‘costs’ at gas pumps

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