Putin

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

US President Joe Biden on Tuesday announced that the US will ban all Russian oil imports and warned citizens that it will bring costs at gas pumps.

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

Secretary of State Antony Blinken on Monday had said that the US and European allies were considering banning oil imports from Russia which sent oil prices through the roof to nearly $139/barrel, reaching their highest level in nearly 13 years.

Last year America imported around 8 per cent of its oil and refined products from Russia.

Biden said the US was acting in close consultation with European allies, who are more dependent on Russian energy supplies.

However, other European countries, which rely more heavily on Russian for their energy needs, have so far shown little enthusiasm for an embargo. Germany on Monday rejected a proposal to ban Russian oil and gas.

Addressing this, Biden while announcing the ban said, “The United States produces far more oil domestically than all of Europe, all the European countries combined — in fact, we’re a net exporter of energy,” he said. “So we can take this step while others cannot, but we’re working closely with Europe and our partners to develop a long term strategy to reduce their dependence on Russian energy as well”. 

Europe relies on imports for 90 per cent of its gas and 97 per cent of its oil products. Russia supplies 40 per cent of Europe’s gas and a quarter of its oil. The US does not import Russian natural gas. 

The announcement was a stunning reversal from President Biden’s previous position on a Russian oil ban.

Last week, White House press secretary Jen Psaki told reporters the Biden Administration did not “have a strategic interest in reducing the global supply of energy” because it would raise prices for American consumers.

Even before the US ban many Western energy companies including ExxonMobil and BP moved to cut ties with the Russia and limit imports. Shell on Tuesday amid rising international criticism, pledged to halt further purchases of Russian energy supplies. 

Will the ban really hit Moscow?

Because the amount of oil the US imports from Russia is modest, Russia could potentially sell that oil elsewhere, perhaps in China or India. Still, it would probably have to sell it at a steep discount, because fewer and fewer buyers are accepting Russian oil.

Last year, roughly 8 per cent of US imports of oil and petroleum products came from Russia. Together, the imports totaled the equivalent of 245 million barrels in 2021, which was roughly 672,000 barrels of oil and petroleum products a day. But imports of Russian oil have been declining rapidly as buyers shunned the fuel.

‘Putin’s price hike’

While announcing the ban, Biden said that this will come at a cost for American citizens. “The decision today is not without cost to your home — Putin’s war is already hurting American families at the gas pump. Since Putin began his military buildup, the price of gas in America went up 75 cents. And with this action, it is going to go up further,” he said. 

“Defending freedom is going to cost us as well in the United States,” he added.

He further said that he would do “everything” he can to minimise what he called “Putin’s price hike” on American consumers.

“We’re taking steps to ensure the reliable supply of global energy,” he said, adding that he would “keep working with every tool at our disposal” to “protect American families and businesses”.

The president also issued a warning to oil and gas producers, who he cautioned against using the crisis brought on by the Russian President to take advantage of US consumers at the pump.