Joe Biden bans US import of Russia oil in attempt to punish Putin

Britain, EU commit to phasing out dependency on Russian energy supply

US President Joe Biden announced a ban on Russian oil and other energy imports on Tuesday in retaliation for the invasion of Ukraine, saying the ban on Russian oil was a ‘powerful blow’ to ‘Putin’s war,’ and warned that Americans ‘defending freedom is going to cost’. Biden added that the current crisis was a reminder that “we must be energy independent”.

The US’ allies too joined hands, with Britain saying it would phase out Russian imports of oil and oil products by the end of 2022 and called on businesses to use the transition period to ensure a smooth transition, while the European Commission published plans on Tuesday to cut EU dependency on Russian gas by two-thirds this year and end its reliance on Russian supplies of the fuel “well before 2030”.

The EU climate policy chief Frans Timmermans said it would switch to alternative supplies and expand clean energy faster under the plans, which national governments will be largely responsible for implementing. 

Oil prices jumped on the news of Biden’s announcement, with benchmark Brent crude LCOc1 for May climbing by 7.06 per cent to $131.91 a barrel by 1020 pm IST.

Earlier in the day, Chinese President Xi Jinping in his virtual summit with French counterpart and German Chancellor criticised the US and EU sanctions against Russia, terming the war in Ukraine as “worrisome”, and said measures such as sanctions would create a global crisis which is in the “interest of no one”.

In a fresh development, Shell said it had 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. The oil giant 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.

Biden has been working with allies in Europe, who are far more dependent on Russian oil, to isolate Russia’s energy-heavy economy and President Vladimir Putin. Two people familiar with the matter told Reuters on Monday the United States may move ahead with a ban on Russian oil imports without the participation of allies in Europe.

The United States 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, and any ban is likely spike gasoline prices and inflation even further. The United States also imports a negligible amount of coal from Russia.

US Senator Chris Coons said the administration was coordinating with European allies “and making sure that we’ve done the groundwork to understand how to effectively implement a ban on Russian energy.”

“We are going to see increased gas prices here in the United States. In Europe, they will see dramatic increases in prices.

That’s the cost of standing up for freedom and standing alongside the Ukrainian people, but it's going to cost us,” Coons told CNN.

The White House was previously coordinating with US congressional leaders working on fast-tracking bipartisan legislation that would ban Russian imports; any White House ban of Russian imports would make any such bill moot.