Biden to announce ban on Russian oil imports: will it affect the price of gasoline in the US?
The White House is set to announce a major new sanction by prohibiting the importation of oil from Russia. Here's how that could affect gas prices in the US...
President Joe Biden is set to announce a ban on Russian oil imports as the United States looks to ramp up sanctions against Russia for the ongoing invasion of Ukraine.
On Tuesday morning Bloomberg reported that Biden will announce the new restrictions in a White House address, after initially being reluctant to ban Russian oil imports. The price of oil is directly related to the cost of gasoline in the United States and, as the price of fuel continues to soar, a ban on Russian imports would almost certainly send the price higher.
The White House has confirmed that Biden will speak on Tuesday morning to announce “actions to continue to hold Russia accountable for its unprovoked and unjustified war on Ukraine.”
Why will Biden ban Russian oil imports now?
The announcement comes just one day after the US reached a new record high national average for a gallon of gasoline, reaching $4.17 on Monday according to AAA. However Biden had come under increased pressure to issue tougher sanctions against Russia.
Ukrainian President Volodymyr Zelenskyy had pleaded with Western powers to cut off the lucrative Russia export market and a group of lawmakers had forwarded legislation on Monday that would ban all Russian energy imports to the US.
Before the invasion of Ukraine oil and gas exports made up more than a third of all Russian government revenues, meaning that disruption to that market could have severe consequences for the Kremlin and its ability to wage a prolonged war. Biden’s decision has been made independently from European allies, who are far more dependent on Russian fossil fuels than the US.
What will a ban on Russian oil mean for gasoline prices in the US?
On Monday White House Press Secretary Jen Psaki addressed calls for a ban on Russian oil by highlighting the financial cost that such a decision would have on Americans. She said that discussions about a ban were “ongoing internally” but warned that imposing one could see the price of gasoline rise further.
“I would note what the president is most focused on is ensuring we are continuing to take steps to deliver punishing economic consequences while taking all actions necessary to limit the impact of prices at the gas pump,” Psaki said.
Russia has vast natural reserves of crude oil which is a key component in the production of gasoline, amongst numerous other uses. Making the supply of oil scarcer would make it more valuable, at least in the short term, and so the cost of any products made using it would rise accordingly.
Even before the ban on Russian oil was first reported experts were warning that gasoline prices could continue to increase.
“Forget the $4 per gallon mark, the nation will soon set new all-time record highs and we could push closer to a national average of $4.50,” said Patrick De Haan of consumer help site GasBuddy.
“We’ve never been in this situation before, with this level of uncertainty. ... Americans will be feeling the pain of the rise in prices for quite some time.”