Vice President Biden said yesterday that the United States would stop buying Russian oil and other energy sources in order to hurt the Russian economy even more for its invasion of Ukraine. “We will not be part of funding Putin’s war,” Biden told the crowd.
Russia is the third-largest oil producer in the world, after the United States and Saudi Arabia. Its energy exports are one of the few ways it has to stay afloat after a tidal wave of other sanctions.
A couple of things make this move a big deal in the financial war against Russia.
- It will have a direct effect on the American people. Less oil means more money for oil, which means more money for gas. And gas prices are going to go up. At $4.17 per gallon yesterday, the average price in the US set a new record. It’s likely to rise even more before things improve. There will be some costs at home, Biden said.
This means: 2. The West isn’t all together. Western countries have been more in sync than a Tufts a cappella group when it comes to other sanctions against Russia. Europe did not join the US in banning Russian energy exports right away. Oil imports from Russia are going to be completely cut off by December. Gas imports from Russia are going to be cut back by two-thirds at the same time.
Biden isn’t mad about it, saying that Europe’s reluctance to ban it right away is understandable because of its dependence on Russian oil. US Vice President Joe Biden said that the US could take this step “when others can’t.” Biden was talking about the fact that Russia only made up 3% of the US’ crude oil imports in 2020. (as opposed to 25 percent for the EU).
So, what’s next?
While the shock to the US’ oil supply won’t be very bad, the Biden administration will still try to fill in the gap with more oil.
Expect US oil producers to start making more oil. Another, more controversial plan is in the works: to bring in oil from Venezuela and Iran, two countries that have been banned from the world market. A US delegation went to Venezuela last weekend to talk. Soon, a new Iran nuclear deal could be in place, which would help Iran’s oil sales.
This is how you zoom out: A come-to-Jesus moment for Europe came when it couldn’t ban Russian oil and gas. This means Europe needs to cut back on its energy use from Russia. Yesterday, the EU came up with a goal to stop buying Russian fossil fuels by 2030, and they want to do it.