President Joe Biden has decided to ban Russian oil imports, toughening the toll on Russia’s economy in retaliation for its invasion of Ukraine, according to a person familiar with the matter.
But the move isn’t without a significant political cost… and pain for American consumers. Biden has suffered through very poor polling numbers this winter amid rampant inflation, a heavily criticized strategy for the U.S. Southern border, and his administration’s inability to stop the bloody assault on Ukraine.
Just months before the 2022 midterm election, the average gas price at the pump hit a new historic high on Tuesday — and is only expected to climb higher.
“The national average price of gasoline in the U.S. today broke the existing record, rewriting the all-time high to today’s $4.104 per gallon, according to GasBuddy, the leading fuel savings platform saving North American drivers the most money on gas,” a press release from GasBuddy said Tuesday.
“The previous all-time high was set back in 2008 at $4.103 per gallon, just ahead of the U.S. Great Recession and housing crisis. The national average price of diesel is also nearing a new record, now at $4.63 per gallon, likely to break the record of $4.846 per gallon in the next two weeks.”
The move to ban Russian oil imports follows pleas by Ukrainian President Volodymyr Zelenskyy to U.S. and Western officials to cut off the imports, which had been a glaring omission in the massive sanctions put in place on Russia over the invasion. Energy exports have kept a steady influx of cash flowing to Russia despite otherwise severe restrictions on its financial sector.
Biden was set to announce the move as soon as Tuesday, the person said, speaking on condition of anonymity to discuss the matter before his remarks. The White House said Biden would announce “actions to continue to hold Russia accountable for its unprovoked and unjustified war on Ukraine.”
The U.S. will be acting alone, but in close consultation with European allies, who are more dependent on Russian energy supplies. European nations have said they plan to reduce their reliance on Russia for their energy needs, but filling the void without crippling their economies will likely take some time.
Natural gas from Russia accounts for one-third of Europe’s consumption of fossil fuel. The U.S. does not import Russian natural gas.
Biden had explained his reluctance to impose energy sanctions at the outset of the conflict two weeks ago, saying that he was trying “to limit the pain the American people are feeling at the gas pump.”
The United States generally imports about 100,000 barrels a day from Russia, only about 5% of Russia’s crude oil exports, according to Rystad Energy.
Last year, roughly 8% of U.S. imports of oil and petroleum products came from Russia.
Even before the U.S. ban, many Western energy companies including ExxonMobil and BP moved to cut ties with Russia and limit imports. Shell, which was criticized after it purchased a shipment of Russian oil this weekend, apologized for the move on Tuesday amid international outrage and pledged to halt further purchases of Russian energy supplies. Preliminary data from the U.S. Energy Department shows imports of Russian crude dropped to zero in the last week in February.
The news of Biden’s decision Tuesday was first reported by Bloomberg.
Before the invasion, Russian oil and gas made up more than a third of government revenues. Global energy prices have surged after the invasion and have continued to rise despite coordinated releases of strategic reserves, making Russian exports even more lucrative.
As a consequence of Russia’s invasion of Ukraine, the U.S. and international partners have sanctioned Russia’s largest banks, its central bank, and finance ministry, and moved to block certain financial institutions from the SWIFT messaging system for international payments.
But the rules issued by the Treasury Department allow Russian energy transactions to keep going through non-sanctioned banks that are not based in the U.S. in an effort to minimize any disruptions to the global energy markets.
Inflation, at a 40-year peak and fueled in large part by gas prices, has hurt Biden politically with voters heading into the November elections.
The sanctions created a possible trade-off for the president between his political interests at home and abroad. By invading Ukraine, Russia has potentially fed into the supply chain problems and inflation that have been a crucial weakness for Biden, who now is trying to strike a balance between penalizing Putin and sparing American voters.
Critics of the Biden administration have pointed out the decision by the White House to shut down the Keystone XL pipeline from Canada, a now-abandoned 1,179-mile pipeline that would have pumped huge amounts of crude from Alberta, Canada’s oil sands to United States consumers.
Restricting the world’s largest exporter of natural gas and second-largest exporter of oil, after Saudi Arabia, could hurt the political unity that U.S. officials say is key to confronting Putin.
Biden is expected to announce the Russian oil ban during a speech at 10:45 am, which you can watch live here —
Read more: Jen Psaki goes on social media tirade over oil prices
The Horn News and the Associated Press contributed to this article