US ban on Russian oil and gas imports

In a co-ordinated move with the UK, US president Joe Biden says Americans will ‘not be part of subsidising Putin‘s war’.

US President Joe Biden says the bank “will deal another powerful blow to Putin’s war machine”. Picture: Jim Watson

The US will ban Russian oil and gas imports, Joe Biden has announced, the latest move in an escalating series of sanctions to punish Russia for invading Ukraine which has pushed the global oil price to a fresh 14-year high.

In a co-ordinated move with the UK, which will phase out Russian oil imports by the end of the year, the White House said the president would sign an executive order on Tuesday (Wednesday AEDT) banning imports of Russian oil, coal and natural gas, pre-empting a push by members of Congress to legislate a ban.

“Russian oil will no longer be acceptable at US ports, and the American people will deal another powerful blow to Putin’s war machine,” Mr Biden said Tuesday at the White House, noting the ban would cost Russia billions of dollars in lost US purchases.

“We are united with our Allies and partners in working together to reduce our collective dependence on Russian energy and keep the pressure mounting on Putin, while at the same taking active steps to limit impacts on global energy markets and protect our own economies,” the White House said.

The price of Brent crude oil, already at the highest levels since 2008 and up 58 per cent since the start of the year, soared around 7 per cent after the announcement to above $US132, adding to pressure on the US and other governments to find replacement energy amid high and rising inflation.

“We will not be part of subsidising Putin‘s war … We can take this step when others cannot,” Mr Biden said, alluding to the fact some European nations relied on Russia for as much as 40 per cent of their energy needs.

Russian oil contributes to around 7 per cent of US oil imports, which mainly come from Canada, Mexico and Saudi Arabia, a share that had been rising in recent years as US domestic oil production declined in the wake of the Covid-19 pandemic.

The US is the world’s biggest oil producer but still imports millions of barrels because it consumes far more oil than it produces. The US may need to seek oil imports from Venezuela or Iran, currently subject to sanctions themselves, analysts have speculated.

The US move followed promises by the EU and UK on Tuesday to drastically curb their reliance on Russian energy by the end of the year. Russia is the world’s third-largest oil producer, responsible for more than 10 per cent of global supply, according official data, its exports accounting for 7 per cent of the world market and half of that going into Europe.

The average price for regular petrol across the US was $US4.17 a gallon (about $1.10 a litre) on Tuesday, the highest level ever, the American Automobile Association said, highlighting the political challenge for the Biden administration and Democrats in a Congressional midterm election year.

Mr Biden said he would try to protect American consumers from the impact of surging prices, pointing to plans to release 60 million barrels of oil from strategic reserves, and pushing back against Republican claims the White House had limited domestic oil production.

“US oil and gas production is approaching record highs, while thousands of drilling permits on federal lands go unused,” the White House said.

“Ukraine will never be a victory for Putin. Putin may be able to take a city but he will never be able to hold the country … when the history of this war is written, Putin‘s war in Ukraine will have left Russia weaker and the rest of the world stronger,” Mr Biden said in his remarks.

Oil giants Exxon Mobil, BP and Shell PLC announced plans to exit Russian operations last week, followed up by US payments giants Visa, MasterCard and American Express.

Originally published as US ban on Russian oil and gas imports