President Biden announced Tuesday that the U.S. will ban all imports of Russian oil, natural gas and coal in response to Vladimir Putin’s invasion of Ukraine.
What he’s saying: “We will not be part of subsidizing Putin’s war,” Biden said. “The American people will deal another powerful blow to Putin’s war machine.”
Get market news worthy of your time with Axios Markets. Subscribe for free.
-
Biden acknowledged that the decision “is not without costs here at home.”
-
“I’m going to do everything I can to minimize Putin’s [gas] price hikes” in the U.S., the president said.
-
“This crisis is a stark reminder that to protect our economy over the longterm, we need to become energy independent,” Biden added. “It should motivate us to accelerate a transition to clean energy.”
Driving the news: Biden had come under growing pressure from Congress and Ukraine to sanction Russia’s most important industry, but hesitated due to concerns about rising energy prices and opposition by U.S. allies in Europe.
-
The U.K., which imports most of its energy from Norway, announced its own phased ban on Russian oil — but not natural gas — by the end of 2022.
-
“This transition will give the market, businesses and supply chains more than enough time to replace Russian imports – which make up 8% of U.K. demand,” U.K. Business Secretary Kwasi Kwarteng tweeted.
The big picture: The European Commission released a plan to reduce EU demand for Russian gas by two-thirds before the end of 2022, and completely phase out dependence on Russian fossil fuels “well before” 2030.
-
Top European leaders on Monday said they recognized the need to reduce the continent’s dependence on Russian oil and gas, but ruled out an embargo for now.
What to watch: House Speaker Nancy Pelosi told the Democratic caucus on Tuesday that the House will move forward with legislation to ban Russian oil imports, despite Biden’s executive action, according to a Democratic aide.
Data: U.S. Energy Information Administration; Chart: Kavya Beheraj/Axios
By the numbers: Russia is the world’s third-largest oil producer, with Europe as its largest buyer.
-
Oil from Russia accounts for roughly 3% of U.S. crude oil imports and about 1% of total crude oil processed by U.S. refineries, according to the American Fuel and Petrochemical Manufacturers (AFPM) trade association.
-
It’s unclear how big of an impact the embargo will have at the pump, though talks about a possible ban or limits sent oil prices soaring to 14-year highs over the weekend.
-
The average regular U.S. gasoline price spiked to a record high on Tuesday, hitting $4.173 per gallon, according to AAA. When factoring in inflation, however, gas prices remain cheaper on a historical basis.
Between the lines: Russian oil sales have already been crimped, even as initial sanctions avoided direct aim at the Kremlin-backed energy sector, due to “self-sanctioning” and Russian isolation from commercial transactions, Axios’ Ben Geman notes.
The Biden administration is exploring ways to unlock more global oil supplies to ease the shock to gas prices.
-
That includes negotiating with the leadership of Saudi Arabia, which Biden had pledged to make a “pariah” after the murder of journalist Jamal Khashoggi, as well as heavily sanctioned Venezuela.
-
The U.S. is also expected to reach a new nuclear deal with Iran in the coming days, potentially giving Tehran the ability to ramp up its oil exports.
Go deeper:
Editor’s note: This story has been updated with additional details throughout.
More from Axios: Sign up to get the latest market trends with Axios Markets. Subscribe for free
