US bans Russian oil imports as Biden warns of ‘cost’ | national politics

By ZEKE MILLER, MIKE BALSAMO and JOSH BOAK – Associated Press

WASHINGTON (AP) — President Joe Biden announced Tuesday that the U.S. would ban all Russian oil imports and put a heavier burden on Russia’s economy in retaliation for invading Ukraine, but acknowledged that doing so will come at a cost to Americans, particularly at the pump.

The action follows requests by Ukrainian President Volodymyr Zelenskyy for US and Western officials to halt imports, a glaring omission in the massive sanctions imposed on Russia over the invasion. Energy exports have kept a steady flow of money into Russia despite otherwise severe financial sector restrictions.

“We will not engage in subsidizing Putin’s war,” Biden declared, calling the new action a “powerful blow” to Russia’s ability to fund the ongoing offensive.

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He warned that Americans would see rising prices, saying, “Defending liberty will be expensive.”

Biden said the US was acting in close consultation with European allies who were more dependent on Russian energy supplies and who he recognized might not be able to join immediately. The announcement marked Biden’s latest attempt to cut Russia off from much of the world economy and ensure that the invasion of Ukraine is a strategic loss for President Vladimir Putin even if he does succeed in seizing territory.

“Ukraine will never be a victory for Putin,” Biden said.

The European Union will this week commit to ending its dependence on Russia for energy needs as soon as possible, but filling the gap without crippling EU economies will likely take time.

Unlike the US, which is a major oil and gas producer, Europe relies on imports for 90% of its gas and 97% of its oil products. Russia supplies 40% of Europe’s gas and a quarter of its oil. The US does not import Russian natural gas.

The issue of oil sanctions has brought the President into a conflict between domestic political interests and an attempt to impose costs on Russia. Although Russian oil accounts for only a small portion of US imports, Biden said he hesitated to ban it, restricting supplies here and driving up gasoline prices.

Inflation is at a 40-year high, fueled in large part by gas prices, and that could hurt Biden heading into November’s midterm elections.

“Putin’s war is already hurting American families at the pump,” Biden said, adding, “I will do everything I can to minimize Putin’s price hike here at home.”

Gas prices have been rising for weeks due to the conflict and in anticipation of possible sanctions against the Russian energy sector. The average price of a gallon of gasoline in the US hit a record $4.17 on Tuesday, up 10 cents in a day and 55 cents since last week, according to the AAA.

Biden said it is understandable that prices are rising but warned the US energy industry against “excessive price hikes” and consumer exploitation.

Even before the US ban, many Western energy companies, including ExxonMobil and BP, moved to sever ties with Russia and limit imports. Shell, which bought a shipment of Russian oil this weekend, apologized for the move amid international criticism on Tuesday and vowed to halt further purchases of Russian energy supplies. Preliminary data from the US Department of Energy shows that imports of Russian crude oil fell to zero in the last week of February.

In 2021, the US imported about 245 million barrels of crude oil and petroleum products from Russia — a 24% increase in a year, according to the US Energy Information Administration.

“It’s an important step in showing Russia that energy is on the table,” said Max Bergmann, a former State Department official who is now a senior fellow at the pro-democracy Center for American Progress.

Bergmann said it’s not surprising that the US could take the move ahead of European nations, which are more dependent on Russian energy.

“All of this happens in a coordinated way, even if the steps are not symmetrical,” he said. “We talk to them all the time.”

News of Biden’s decision on Tuesday was first reported by Bloomberg.

The White House announcement comes amid bipartisan pressure on Capitol Hill to ban Russian energy and impose other economic costs.

Last week, House Speaker Nancy Pelosi gave a big boost when she declared, “Ban it.”

On Monday, Democrats in the powerful Ways & Means Committee released an announcement on a bipartisan bill to ban Russian oil imports and impose more trade sanctions on the country, according to an adviser, because the White House was pushed back before Biden made his decision.

Pelosi told Democrats in a meeting early Tuesday that the House would proceed with a vote on legislation banning Russian oil imports, according to a person who was granted anonymity to discuss the private caucus meeting.

“The United States economy can handle all the challenges associated with higher oil prices,” said Jason Furman, a Harvard professor and former top economic adviser to President Barack Obama. “But it will come with some challenges. We will have higher prices at the pump, there is no way around that.”

Before the invasion, Russian oil and gas accounted for more than a third of state revenues. Global energy prices have skyrocketed following the invasion and have continued to rise despite a coordinated release of strategic reserves, making Russian exports even more lucrative.

In the wake of Russia’s invasion of Ukraine, the US and international partners have sanctioned Russia’s largest banks, its central bank and Treasury Department, and moved to ban certain financial institutions from the SWIFT messaging system for international payments.

But rules enacted by the Treasury Department allow Russian energy transactions to continue to be processed through unsanctioned non-US banks to minimize disruption to global energy markets.

Chancellor Olaf Scholz said he was against a European ban on Russian energy imports and that there was no other way to meet the European Union’s needs for fuel, heat and electricity, and industrial use. Vice Chancellor Robert Habeck said Tuesday that during his visit to Washington last week, US officials acknowledged Europe’s situation was different.

“You told me in the talks that you will neither demand nor ask Germany to do the same. But I would conclude for us and for me that we need to create the opportunity to take similar action as soon as possible.”

While Russian oil makes up a small portion of total US energy imports, the US could replace Russian crude with imports from other oil-rich nations, but that could prove politically problematic.

Key US senators warn the Biden administration against seeking an oil import deal with Nicolas Maduro’s regime in Venezuela.

“The Biden administration’s efforts to unite the entire world against a murderous tyrant in Moscow should not be undermined by supporting a dictator under investigation for crimes against humanity in Caracas,” said Sen. Bob Menendez, DN.J., the chairman of the Foreign Relations Committee, in a statement late Monday. “The democratic aspirations of the Venezuelan people, like the determination and courage of the Ukrainian people, are worth much more than a few thousand barrels of oil.”

AP writers Matthew Daly, Lisa Mascaro, and Chris Megerian contributed.

Copyright 2022 The Associated Press. All rights reserved. This material may not be published, broadcast, transcribed or redistributed without permission.

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