President Biden has banned the import of oil, gas and coal from Russia as punishment for the country waging what he called a “vicious war of choice”. Almost inevitably, the decision is bound to result in “painful and higher prices” for energy and even at the gas pump.
The US President signed an executive order on Tuesday that prohibits “anyone in the US from importing Russian crude oil and certain petroleum products, liquefied natural gas and coal”. Also banned are new US investments directly in the energy sector in foreign companies that are investing in energy production in Russia. Mr Biden’s decision effectively shuts off the relatively small flow of oil to the United States, which receives less than 10 per cent of its energy resources from Russia.
In point of fact, Republicans and Democrats in Congress had been urging the President to take drastic steps to ensure that Putin was not earning a profit from the American purchase of oil. Biden has pledged to do what he could to minimize the impact of Tuesday’s decision on gas prices, yet he did not specify whether the United States would try to import oil from other countries that have been impacted by sanctions, notably Venezuela and Iran.
In parallel, he has warned oil companies in the United States not to take advantage of the decision by arbitrarily raising the price of the fuel. “Russia’s aggression,” he said, “is costing us all. And it’s no time for profiteering or price gouging.” Before announcing the step on Tuesday, Biden was coping with a dilemma over concerns about whether it would accelerate the already rapid rise in the price of gasoline ~ a potent electoral plank in the United States.
In announcing his decision, Biden acknowledged that certain European countries, including Germany and France, are very unlikely to follow the US initiative not the least because they rely far more heavily on energy from Russia. Not wholly unrelated is Britain’s decision to phase out the import of Russian oil and oil products by the end of this year. This, it is hoped, will give the market and businesses more than enough time to find alternatives to the imports, which make up eight per cent of the demand.
The government will also work with companies through a new Taskforce on Oil, so-called, to support them to make use of this period in finding alternative supplies. Clearly, what President Biden calls a “vicious war of choice” is taking its toll both in terms of human life and now the economies of the comity of nations, most particularly of countries that are dependent on fuel supplies from Russia.