The United States will ban all imports of all oil and gas from Russia, President Joe Biden announced on Tuesday.
“This is a move that has strong bipartisan support in the Congress and, I believe, in the country,” Biden said. The United States president said his country “will not be a part of subsidising [Russian President Vladimir] Putin’s war”.
He added that through this move, the United States was “targeting a main artery of Russia’s economy”.
Biden said that the United States is a net exporter of energy, which is why Washington “can take this step, while others cannot”.
He added, however, that his country was working with European countries to develop a long-term strategy to reduce their dependence on Russian energy.
Biden’s announcement came a day after Russia warned that crude oil prices could increase to as much as $300 a barrel (Rs 23,076.81) if the western countries continue with the sanctions imposed on exports from the country, according to Reuters.
“It is absolutely clear that a rejection of Russian oil would lead to catastrophic consequences for the global market,” Russia’s Deputy Prime Minister Alexander Novak had said on Monday. “The surge in prices would be unpredictable. It would be $300 per barrel if not more.”
Pointing out that Russia supplied 40% of Europe’s oil requirements, Novak warned that Moscow could retaliate against Germany’s decision to freeze certification of the Nord Stream 2 pipeline that runs between the two countries.
Spike in crude oil prices
Brent crude oil has been trading at its highest levels since 2008 due to the sanctions imposed by the US and European countries on Moscow over its invasion of Ukraine. Brent is a global price benchmark for crude oil extracted from the Atlantic basin. It is used to set the price of two-thirds of the world’s trade of crude oil supply.
On Monday, the Brent crude oil benchmark had briefly hit more than $139 a barrel (Rs 10, 625.29), before closing at around $123 (Rs 9,463). At 4.30 pm on Tuesday, crude oil prices were at $127.31 (Rs 9,794.59), according to Bloomberg.
Experts said that the fluctuation in crude oil rates was due to European leaders not being too keen on banning Russian imports completely despite Blinken’s statement on the matter.
“Global risk sentiment started the week deeply negative, before improving as European leaders indicated they would resist sanctions on Russian energy exports, preferring instead a determined strategy to reduce dependency on Russian imports,” analysts at financial services firm ANZ said in a note, according to Reuters.