American President Joe Biden announced Tuesday a ban on “all imports of Russian oil and gas and energy.”
The move increases economic pressure against Russia for its invasion of Ukraine. But it could bring higher energy prices and affect the world’s economies.
“The decision today is not without cost here at home,” Biden said. “Since Putin began his military build-up at Ukrainian borders…, the price of gas at the pump in America went up 75 cents and with this action, it’s going to go up further.”
The United States Energy Information Administration said, in 2021, the United States imported about 245 million barrels of oil from Russia. That adds up to 8 percent of the country’s energy imports. As for natural gas, the U.S. has been an exporter since 2017.
In London, Prime Minister Boris Johnson said Britain would end imports of Russian oil and oil products by the end of the year. British officials said that would give businesses time to replace Russian imports which make up 8 percent of demand.
Other European nations, however, are more dependent on Russian energy supplies. European Union (EU) leaders will meet Thursday to discuss a plan to replace them without hurting their economies. The EU plans to reduce Russian energy imports “well before 2030.” Russia supplies almost 40 percent of EU natural gas for home heating and 25 percent of its oil.
Even before the U.S. ban, many Western energy companies, including ExxonMobil and BP, have already ended their investments in Russia and limited imports. Shell, which purchased some Russian oil over the weekend, announced an immediate halt Tuesday. It also planned to close all its gas stations in the country.
Will the ban hurt world’s economies?
Ukrainian President Volodymyr Zelenskyy has repeatedly asked the U.S. and Western nations to stop Russian oil imports. Before the invasion, Russian oil and gas exports brought in more than a third of government revenues. Energy prices have since increased greatly, making Russian oil exports even more valuable.
Following the Russian invasion of Ukraine, the international price of a barrel of oil reached $100. On Tuesday, the price increased to around $130 a barrel. And Oslo-based firm Rystad Energy said the import bans could send oil prices to $200 a barrel.
"How high can oil prices go? Pick a number, this is a market in disarray," noted Mike Tran, an oil expert at RBC Capital Markets.
Economists expect higher oil prices to slow the world’s economy, which is still recovering from the COVID-19 pandemic. Already, central banks in the U.S. and Europe are planning to raise interest rates to deal with higher prices and inflation.
I'm Jonathan Evans.
Hai Do adapted this story for Learning English based on reporting from Reuters and The Associated Press.
Words in this Story
revenue – n. money that is collected by government
disarray – n. a confused messy condition