US President Joe Biden announced a ban on Russian oil and other energy imports on Tuesday in retaliation against the invasion of Ukraine, underscoring strong bipartisan support for a move that he acknowledged would drive up US energy prices.
“We’re banning all imports of Russian oil and gas energy,” Biden told reporters at the White House.
“That means Russian oil will no longer be acceptable in US ports and the American people will deal another powerful blow to (Russian President Vladimir) Putin’s war machine.”
Oil prices jumped on the news, with benchmark Brent crude for May climbing 5.4 per cent to $129.91 a barrel. Gas prices hit a record in the United States on Tuesday. The average price of a gallon of regular gasoline reached $4.173 on Tuesday, according to AAA, surpassing the previous high in July 2008, when the national average was $4.114. Tuesday’s average represented an increase of about 72 cents from a month ago, including about 55 cents in the past week. The prices are not adjusted for inflation.
Biden has been working with allies in Europe, who are far more dependent on Russian oil, to isolate Russia’s energy-heavy economy and Putin. Britain announced shortly before Biden’s remarks that it would phase out the import of Russian oil and oil products by the end of 2022.
Biden said sanctions imposed by the US and its allies had already caused the Russian economy to “crater”. He said the latest moves had been made in close consultation with allies and partners around the world.
The US imported more than 20.4 million barrels of crude and refined products a month on average from Russia in 2021, about 8 per cent of US liquid fuel imports, according to the Energy Information Administration.
Biden predicted prices would rise further as a result of “Putin's war,” but pledged to do all he could to minimise the impact on Americans.
More exits
Shell has stopped buying Russian crude on Tuesday and said it would phase out its involvement in all Russian hydrocarbons from oil to natural gas over Ukraine, becoming one of the first major Western oil companies to abandon Russia entirely.
Shell apologised on Tuesday for buying Russian oil last week after it had said it would pull out of its Russian operations, including the Sakhalin- 2 LNG plant in which it holds a 27.5 per cent stake and which is operated by Gazprom.
Price hike hint
Finance minister Nirmala Sitharaman on Tuesday hinted that the current spike in international oil prices may upset financial provisions of her Union Budget as she voiced concern over the impact of spiralling oil rates on the economy.
Separately, oil minister Hardeep Singh Puri said oil companies will decide on petrol and diesel pricing.
“Oil prices are determined by global prices and there is a war-like situation in one part of the world and the oil companies will factor that in. The oil companies will themselves determine the prices.”
CNG price in the national capital and adjoining cities was hiked by 50 paise per kg on Tuesday.
