The US government has announced that it will no longer accept Russian oil or energy imports and wants Western allies to follow suit.
US President Joe Biden announced a US ban on Russian oil and other energy imports on Tuesday, March 8th. The embargo represents the latest attempt to crank up the pressure on the Eastern European powerhouse.
As the US President put it:
“Russian oil will no longer be accepted at US ports, we will not be part of subsidizing Putin’s war.”
According to Biden, the latest sanction on Russia targets “the main artery of [the Russian] economy.”
Biden explained that his administration arrived at the decision after careful consultation with allies. The decision also resulted from both sides of the US political divide to increase punitive measures on the Russian economy. By not accepting Russian oil at US ports, the American government expects to hit Russian President Vladimir Putin hard. This is because the Russian economy heavily relies on oil and gas revenue – making up over 40% of national proceeds.
Similarly, the UK also expected to proscribe Russian oil by the end of the year. The UK Prime Minister Boris Johnson acknowledges that his country’s shunning of Russian energy imports may not immediately impact the Eastern European nation. However, he suggested that Russia may begin to feel the bite over a sustained period, especially considering previous sanctions. As the UK Prime Minister put it:
“What it will do is add to the pressure we’re already seeing on Russia and don’t forget that the economic impact of the sanctions that the UK has led has been extreme”.
Presently, Russia supplies about 8% of US oil and refined product imports and 6% of the UK’s oil imports.
US Considers Alternative Measures for European Allies to Decrease Dependency on Russian Oil
Although Biden expects his European allies to follow suit, he also admitted they may not be in a position to do so. Regardless, he suggested that his government will work with allies to develop a “long-term strategy” to reduce their dependence on Russian energy imports.
For instance, the European Union, far more reliant on Russian energy than America, suggested switching to alternative supplies. Furthermore, the European Commission is accelerating the expansion of its clean energy initiatives to fill the shortfall. The ultimate goal, it says, is to wean Europe off Russian fossil fuels “well before 2030”. According to the European Commission’s Vice-President Frans Timmermans:
“We’re not standing here to say this is going to be in any way easy, but I am also deeply convinced that even if it’s not easy, even if it’s very hard, it’s something we need to do, because now it’s also intimately linked to our security.”
Other Potential Oil Suppliers to the US Step In
A few other countries are stepping in as surrogate oil suppliers to the US in light of the ban. For instance, Reinaldo Quintero, president of the association representing Venezuelan oil, suggested that the South American country could increase its production to help replace Russian oil. In a media session, Quintero stated that Venezuela could potentially ramp up oil production levels by 400,000 barrels a day.
Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify crypto stories to the bare basics so that anyone anywhere can understand without too much background knowledge.
When he’s not neck-deep in crypto stories, Tolu enjoys music, loves to sing and is an avid movie lover.
