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The US has banned imports of Russian oil and natural gas in retaliation for the Kremlin’s invasion of Ukraine – a move that will further complicate the Biden administration’s effort to tamp down energy costs for American households.
President Biden announced the ban following days of bipartisan pressure to take action against Russia’s energy sector, which went largely untouched in previous rounds of sanctions. Europe remains heavily reliant on Russian oil, even as it attempts to isolate the Kremlin in response to the invasion.
Biden and other proponents say the ban is necessary to limit Russia’s sources of income – though the president acknowledged US motorists will be paying even more at the pump.
“Defending freedom is going to cost,” Biden said during an address outlining the need for an import ban.
How much oil does the US import from Russia?
While far less reliant on Russian oil and gas than its European counterparts, the US did import some supply prior to the ban. The US imported about 672,000 barrels per day of crude oil and petroleum products from Russia in 2021, according to data from the Energy Information Agency. That total accounted for roughly 8% of all US imports.
Most of the oil and related products the US imports come from Canada, which supplies more than 51%. Mexico and Saudi Arabia are also key suppliers.
Many firms had already halted purchases from Russia due to concerns about the effects of sweeping economic sanctions and the escalating violence in Ukraine. Gas Buddy analyst Patrick De Haan recently told The Post that shipments had already “plummeted” since the war began, with existing sanctions as a “chokehold” on Russian oil exports.
Why is the US banning imports?
The ban is part of an ongoing effort by the Biden administration and other Western allies to put maximum pressure on the Russian economy in a bid to convince Russian President Vladimir Putin to end his invasion of Ukraine. Russia’s oil and gas exports account for more than 40% of the country’s annual revenue — meaning the Kremlin can ill afford a loss of customers.
Biden argued the import ban will also limit Moscow’s ability to fund the invasion, noting the US “will not be part of subsidizing Putin’s war” with oil and gas purchases.
Why are gas prices going up?
While the US sources a small portion of its oil from Russia, the import ban will inflame concerns about further disruptions to the global energy market, which has struggled to keep pace with demand as the COVID-19 pandemic wanes.
US gas prices — which already hit a record high during the Ukraine war — will continue to rise as companies pass along their higher costs to consumers. The national average price for a gallon of gas rose 55 cents in the last week amid economic sanctions against Russia and other geopolitical tensions.
What do oil and gasoline cost right now?
West Texas Intermediate crude oil, the US price benchmark, was trading just below $122 following Biden’s speech. Brent crude, the global benchmark, was trading above $126.
What does the US import ban mean for the global energy market?
Oil prices are expected to surge much higher, but it’s still unclear how high they could go. Analysts told The Post that oil could cost $150 or more a barrel in the coming weeks. Meanwhile, the Kremlin claims oil could surge to $300 per barrel and has threatened to cut off the Nord Stream 1 pipeline — Germany’s key source of fuel.
With Post wires
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