U.S. President Joe Biden announced an immediate ban on Russian oil and other energy product exports from the country in response to its continued actions in Ukraine. Biden warns Americans that the move could push fuel prices even higher than current record levels.
The U.K. announced a similar decision, stating that it would completely phase out Russian energy imports by the end of the year. White House officials said products such as natural gas and coal from Russia would be barred from entering the country.
Biden said the move should deal a "powerful blow" to Russia's war machine. He added that they had consulted with the governments of the nation's allies before making the decision. Russia produces roughly 7 million barrels per day, or 7% of the total global production, and is the world's top supplier of crude and oil products.
Data from the American Fuel and Petrochemical Manufacturers trade group showed that the U.S. had imported an average of 209,000 barrels per day of crude oil and 500,000 barrels per day of various petroleum products from Russia last year. This accounted for 3% of all crude oil imports into the U.S. and 1% of total crude oil processed by U.S. refineries. For Russia, the amount represented around 3% of its' overall exports.
Some analysts claimed that the ban on Russian oil is something that the U.S. can afford right now, but European countries will likely not be able to deal with the impact of such a decision. Analysts said the U.S. could deal with the slight drop in supply, but continental Europe would be making a much harder commitment.
Nevertheless, the ban on Russian oil will be felt by Americans in the pumps. Last month, the fear of a ban had already pushed up oil prices by 30%, with prices hovering above $130 per barrel and a gallon of standard petrol retailing for an average of $4.17 in the United States on Tuesday. Energy specialists warn that if customers continue to avoid Russian oil, prices might rise to $160 or perhaps $200 per barrel, resulting in U.S. gasoline costs of more than $5 per gallon.
Analysts said further inflation would be the most immediate consequence. The U.S. is now experiencing its greatest inflation in 40 years, and statistics due out on Thursday are projected to show a 7.9% increase in the Consumer Price Index. This might have a significant impact on the standard of living for everyone in the country.
