Six things to know about the U.S. ban on Russian energy

The Biden administration announced Tuesday that the U.S. was targeting “the main artery of Russia’s economy” by banning all imports of Russian oil, gas, and energy. This significant move in response to Russia’s invasion of Ukraine will have major ripple effects at home and abroad. Here are our 6 major takeaways from today’s news.

1. THE FIRST STEP, NOT THE LAST

Less than 10% of US oil and refined imports come from Russia. The UK, which gets 6% of its oil imports from Russia, declared it will ban all imports of Russian oil in a phased approach over the rest of 2022.?

2. THE EU'S RELIANCE ON RUSSIAN ENERGY

The EU imports around a third of its refined products from Russia. Leaders on the continent, such as Germany’s Olaf Scholz, have balked at a ban, but President Biden said the United States’ latest moves were made in close consultation with allies and partners around the world.??

3. A SIGNIFICANT BLOW TO RUSSIA AND PUTIN

Russian oil and gas exports made up more than a third of its revenue, and Russia is the third-largest oil exporter. In his speech Tuesday, Biden said that previous sanctions from the US and its allies had already caused the Russian economy to “crater.”?

4. CONTINUALLY RISING OIL PRICES IN THE US

US oil prices have climbed 45 cents in the past two weeks—and their highest since 2008—amid fears surrounding Russia’s war on Ukraine. This ban is expected to send those already high prices soaring, but Biden pledged to work to minimize the impact on Americans while recognizing the necessary sacrifice to combat “Putin’s war.”

5. POLITICAL REPERCUSSIONS AT HOME

This move has widespread bipartisan political support in the US, but there are potential political pitfalls, including rising inflation and turning to oil-rich but problematic oil countries like Maduro’s Venezuela.

6. RUSSIA'S RESPONSE

Russia has postured that further energy sanctions could cause the global market’s prices to skyrocket and have threatened to close the Nord Stream 1 gas pipeline that connects with Germany. Doing so, however, would weaken Russia’s war chest.?

Want to know more about this developing situation? Register to read our free article here.