In response to Russia’s continued war with Ukraine, President Biden announced an Executive Order (EO) to ban the import of Russian oil, liquefied natural gas, and coal to the United States. This decision was made in close consultation with US allies and partners around the world, as well as Members of Congress of both parties. This ban continues the drip of severe economic consequences placed on Russia following the invasion.
Executive Order bans:
- The importation into the United States of Russian crude oil and certain petroleum products, liquefied natural gas, and coal. Last year, the US imported nearly 700,000 barrels per day of crude oil and refined petroleum products from Russia and this step will deprive Russia of billions of dollars in revenues from US drivers and consumers annually.
- New US investment in Russia’s energy sector, which will ensure that American companies and American investors are not underwriting Vladimir Putin’s efforts to expand energy production inside Russia.
- Americans will also be prohibited from financing or enabling foreign companies that are making investment to produce energy in Russia.
To try to get fuel prices back to normal, The Administration has committed to releasing more than 90 million barrels from the Strategic Petroleum Reserve this fiscal year, with an emergency sale of 30 million barrels.
But how will this impact the US economy? Difficult to say for sure. According to the International Energy Agency, the US imported less than 700,000 barrels of oil per day from Russia in 2021. That represents less than 10 percent of what the US imports globally. However, if the ban boosts global oil and gas commodity prices and pushes up prices at the pump, that will add to the inflationary pain that is already being felt.