Day 14 of Russia-Ukraine Crisis: US ban on import of Russian oil; Know more

Even as the Ukrainian President Volodymyr Zelensky announced that he is no longer pressing for NATO membership, the Biden administration went ahead and officially announced the ban on imports of Russian oil, coal and gas. The US President Joe Biden while announcing the ban said, “Ukraine will never be a victory for Putin”. Adding, the decision to ban was taken in “close consultation’’ with allies.

The British government too has announced that it will phase out the Russian oil imports by the end of 2022.

With the fresh sanctions in place, the oil prices are expected to go up.

According to information in the public domain, Russia is the world’s top exporter of crude and oil products combined. It produces around 7 million barrels per day (bpd). Russia exports almost 30 percent to the European nations.

According to the American Fuel and Petrochemical Manufacturers (AFPM), a trade association, the US imported around 209,000 bpd of crude oil and 500,000 bpd of other petroleum products from Russia. This was in 2021. For the US it was just 3 percent of its crude oil imports and around I percent of the total crude which is processed by its refineries. And for Russia it is about 3 percent of its total exports.

And, AFPM states that since 2019, the imports of unfinished heavy oils from Russia increased as this was meant to replace heavy sour crude from Venezuela that the US was not importing after it had imposed sanctions on the South American nation.

“The ban imposed by the US administration over imports of oil, gas and coal from Russia is going to be economically beneficial to the US,” according to a strategic expert.  With the prices going up, the shale gas prices in the US will then be profitable.

If other countries too impose a ban on buying Russian crude, the prices in the global market could touch USD160 — USD200 a barrel.

What does the ban imposed by the Biden administration include?

According to a senior US official in the Biden administration, this ban includes no new purchases of Russian crude oil, liquefied natural gas, and coal, certain petroleum products, and it also means winding down the deliveries of the already contracted purchases.

No new investments in the energy sector of Russia as that will help in ensuring that no American companies and investors are not underwriting efforts of that country to expand energy production.

The US President in his address stated that the US has not asked any other country to join in import bans and it did not expect them to.

Is Europe more dependent on Russian oil?

The answer is yes. The European nations are very dependent on Russia for natural gas imports and in 2021 the European Union (EU) had imported 155 billion cubic metres of natural gas. This accounts for about 45 percent of gas imports and almost 40 percent of the EU’s total gas consumption.