How much oil does the US import from Russia?
The situation in Ukraine has been linked to sharp rises in the cost of crude oil as the global markets are spooked by the prospect of conflict.
Russian troops have now been stationed in huge numbers on the Ukrainian border for weeks and Western powers are putting pressure on President Vladimir Putin to order a withdrawal. Their course of action could see Russia hit with major economic sanctions designed to hurt Russian industry.
Russia uses its vast natural supplies of crude oil as a major export market and one which has grown in recent years. In spring 2021 imports of Russian oil to the United States in their highest level in a decade, become the second-largest exporter of oil to the US later that year.
Across 2021 the US imported between 12 million as 26 million barrels of crude oil and petroleum from Russia every month. In November 2021, the most recent figures on record, the Energy Information Agency reports that the US took 17.8 million barrels.
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US becomes increasingly reliant on Russian oil imports
The pandemic has brought about a global supply chain disaster with almost all sectors reporting supply shortages. This has had an impact on all industries and the price of oil has soared as a result.
On Friday, when National Security Advisor Jake Sullivan announced that Russia could invade Ukraine “at any moment,” oil prices rose by more than 2%. This took the price to the highest in seven years and pushed it closer to the $100 per barrel figure that has not been seen since 2014.
On that occasion, the price rise was fuelled by Russia’s annexation of the Ukrainian territory of Crimea. The uncertainty and threat of Western sanctions drove up the price back in 2014 and similar conditions have arisen from the ongoing dispute on the Ukrainian border.
"The market remains hyper-sensitive to the developments over the Russian/Ukraine situation," said John Kilduff, partner at investment advisors Again Capital. "This is now intensifying to a terrific degree. Right now, it's buy now, ask later."
Hopes of peaceful solution calm oil markets
Despite the understandable concern and uncertainty in the markets, prices of crude oil steadied on Tuesday following claims from Russia authorities that it was withdrawing some troops from the border.
West Texas Intermediate (WTI) and Brent crude oil both closed Tuesday more than three points down, suggesting that investors believe that the threat of serious disruption in the region may have been overstated. However the volatile nature of the global economy as it recovers from the pandemic means that the price of oil could hit new heights in the coming weeks, even if the situation in Ukraine is clamed.
Jonathan Barratt, chief investment officer at Probis Group, explained: “Technically we could see prices heading back to $90 a barrel on profit-taking, but they will trend higher towards $100 as the economy is getting back on track and more demand is coming through in a tight market.”