The Biden administration is reportedly considering a ban on U.S. imports of Russian crude oil as Congress works towards passing such restrictions to punish Russia for its invasion of Ukraine.
“Conversations are taking place within the administration and with the U.S. oil and gas industry on the impact such a move would have on American consumers and the global supply,” Bloomberg reported.
Earlier this week, the White House dismissed such suggestions from lawmakers however pressure is mounting for a ban in tandem with American outrage over Russia’s invasion and lawmakers have made it clear that they will act; it’s just not clear what they can do.
Cecilia Rouse, the chair of the White House Council of Economic Advisers told reporters at a briefing, “We are looking at options that we can take right now, if we were to cut the U.S. consumption of Russian energy — but what’s really most important is that we maintain a steady supply of global energy.”
Data from the U.S. Energy Information Administration shows that last year, Russian oil accounted for about 3 percent of all crude shipments that arrived in the United States and according to the intelligence firm Kpler, U.S. imports of Russian crude so far in 2022 have dropped to the slowest annual pace since 2017.
When considering other petro products, like unfinished fuel oil that can be used to produce gasoline and diesel, Russian products accounted for about eight percent of total 2021 oil imports.
The White House is trying to assess if banning Russian crude imports would actually hurt the Russian economy, “or if the crude would simply go to other markets and drive up U.S. gasoline prices,” Bloomberg reported.
David Welch, chief economist at oil-data provider Vortexa Ltd said, “Any restrictions on Russian flows would cause pain exclusively on the side of the buyer because the Russians can easily place their fuel oil in China or India,” adding that, “That would put the U.S. in a difficult position because of the impact on gasoline prices.”
The Russian economy is already being rocked by financial penalties that have cratered the ruble and halted stock trading in the country, however Congress is looking to deliver more pain for the Russian economy.
In a bipartisan move, senators Joe Manchin, a Democrat, and Lisa Murkowski, a Republican, have introduced legislation that would essentially block the flow of Russian oil and gas into the United States.
In addition, House Speaker Nancy Pelosi has joined with Republicans in supporting the idea.
Reportedly, President Joe Biden is in close touch with Manchin on the proposal, which the Senate has allowed to bypass the committee process.
On Thursday, White House Press Secretary Jen Psaki spoke out against the proposed legislation saying, “Our objective and the president’s objective has been to maximise impact on Russia while minimising impact to us and our allies and partners,” adding that “We don’t have a strategic interest in reducing the global supply of energy, and that would raise prices at the gas pump for the American people, around the world.”
However Psaki added, “We are continuing to look at other options we could take right now to cut U.S. consumption of Russian energy.”