The US Ban on Russian Oil Will Have Little Impact on Russia’s Economy
- The US is banning Russian energy imports, including oil, President Joe Biden announced Tuesday.
- It’s the latest US move to sanction Russia as a response to its invasion of Ukraine.
- However, Europe imports significantly more oil from Russia than the United States.
The United States will no longer import energy — including crude oil and refined products like gasoline and jet fuel — from Russia, President Joe Biden announced on Tuesday morning.
“We will not be subsidizing Putin’s war,” Biden said in announcing the hotly awaited move.
It’s the White House’s latest and boldest step to debilitate Russia’s economy in response to its invasion of Ukraine in late February, but it may have muted effect without other countries joining in step.
The US, alongside the European Union, UK, and other allies, has deployed a variety of sanctions on Russia — from banning Russian flights to freezing assets tied to its central bank. As a result, the value of Russia’s primary currency has collapsed and its citizens and corporations have been widely booted from the global financial network.
That unity doesn’t extend to the energy import ban that the US is imposing: The European Union isn’t joining the US on this sanction, Biden said.
“We’re moving forward with this ban understanding that many of our European allies and partners may not be in a position to join us,” he said. “We can take this step when others can’t, 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.”
The US primarily imports energy — crude oil, as well as refined products like gasoline, oil, and jet fuel — from Canada, Mexico, and Saudi Arabia, according to the US Energy Information Association. In 2021, just under 10% of America’s overall oil imports were from Russia, a senior White House official said Tuesday. That adds up to just 3% of total US oil consumption coming from Russian imports, according to the EIA.
In Europe, however, dependency on Russian energy is much greater: Nearly half of its gas imports are from Russia, according to the European Commission, and nearly one-third of the continent’s oil imports are from the country, the White House official said.
As such, the EU is unable to outright stop importing energy from Russia without doing “more harm to ourselves than we do to Putin,” EU Commission VP Frans Timmermans said at a press conference on Tuesday.
That disparity suggests that the US ban on Russian oil imports might not have too huge of an impact on the country’s economy, as Russia’s energy sector will still have plenty of European customers for the foreseeable future.
The Commission did, however, announce a plan to dramatically reduce its reliance on Russian energy. Dubbed “RePowerEU,” the plan intends to reduce European dependence on Russian energy imports dramatically within the year.
That effort will “will diversify our gas supplies, speed up the renewable roll-out, improve energy efficiency and replace gas in heating and power,” European Commission president Ursula von der Leyen said. “It can reduce our demand for Russian gas by 2/3 before the end of the year.”
In response, Russian President Vladimir Putin has threatened to cut off energy exports to Europe.
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