Biden is banning Russian oil — and bracing for the consequences

In an announcement Tuesday, Biden said the step was done to “inflict further pain on Putin.”

WASHINGTON, DC - MARCH 04:  U.S. President Joe Biden speaks about the February jobs report during an...
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On Tuesday, President Biden announced that the United States will ban the import of Russian oil in the latest attempt to squeeze the country’s finances and push it to end its war on Ukraine. “The United States is targeting the main artery of the Russian economy,” Biden said during a press conference announcing the decision, noting that it is a “step we are taking to inflict further pain on [Vladimir] Putin.”

The move is a significant one — and one that experts have been calling for as potentially the most powerful way to cripple Russia’s economy. Russia exports about 5 million barrels of crude oil per day, according to the U.S. Energy Information Administration. Gas and oil sales make up nearly 40% of Russia’s federal budget revenue and account for nearly 15% of the country’s GDP, according to expert analysis. Cutting off that source of revenue could have a major impact on the Russian economy, which is already in a near-freefall due to sanctions put in place by the U.S. and the European Union.

While the U.S. deciding to cut off Russian oil exports will put a dent in Russia’s revenue, a united effort among other countries will be needed to cut Russia off entirely — and European nations appear considerably less willing to participate. “We’re moving forward with this ban understanding many of our European allies and partners may not be in a position to join us,” Biden said.

While Biden held talks with leaders of other nations over the last few days, allies in Europe have been unwilling to join the ban thus far, according to Reuters. German Chancellor Olaf Sholz said Monday that Europe hasn’t sanctioned Russian energy exports because there is “currently no other way of securing Europe’s supply of energy for heat generation, for mobility, for power supply, and for industry.”

For the U.S., Russian oil accounts for just 8% of all oil imports, and experts believe the U.S. is capable of making up that loss by simply importing more from other nations. Biden reportedly is planning to meet with Saudi Arabia to discuss oil, has considered easing sanctions on Venezuela to open up the possibility for importing oil, and has already released some oil from the U.S.’s strategic reserve to make sure there is no supply shortage.

“The decision today is not without costs here at home. Putin’s war is already hurting American families at the gas pump,” Biden said. “I’m going to do everything I can to minimize Putin’s price hike here at home.” Biden also warned oil companies and banks not to artificially raise prices to capitalize off this opportunity to make a buck. “This is no time for profiteering or price gouging,” he said.

The price of oil has already climbed to some of the highest levels it has been since 2008, and gas prices in the U.S. are at an all-time high. Those prices may not have reached their ceiling, but there appears to be widespread public support for the decision to ban Russian oil — and a bipartisan bill to back the decision, as well.