The US and UK will pursue Russian oil sanctions without Europe

Both the US and UK will ban Russian oil in response to the war in Ukraine, the countries’ leaders announced today (March 8). The countries are moving forward on sanctions without Europe, which is more heavily dependent on Russia for energy. “Many of our European allies and partners may not be in a position to join us,” US president Joe Biden said on a speech today. “We can take this step while others cannot.”

The Brent crude benchmark, which prices most of the world’s oil, rose to a record high of $133 a barrel ahead of the news before dropping below $130 later in the day.

What the US and UK sanctions on Russian oil entail

The US is banning all Russian oil, gas, and coal imports, while the UK plans to phase out Russian oil imports over the next year. Prime minister Boris Johnson is expected to make an announcement later this week detailing ways to reduce British imports of Russian gas, which is not included in the ban for now.

Russian oil and petroleum accounted for about 8% of US imports last year, and officials are currently exploring alternatives to Russian energy. The UK also imports about 8% of its oil from Russia, and about 18% of Britain’s diesel is sourced from the country.

The bulk of Russia’s natural gas exports went to Europe in 2020, with 16% going to Germany, compared with 4% to the UK, according to a US Energy Information Administration analysis. Russia similarly exported most of its crude oil and other condensate exports to Europe that year, with just 1% going to the US.

How Russian oil bans will affect the US and its allies

While the ban on Russian oil shouldn’t affect Americans’ access to energy, Biden acknowledged it will likely have an impact on US gas prices, which rose above $4 a gallon this week and hit a record today. Most Americans support a ban on Russian oil even if it results in higher gas prices, according to a recent poll.

Although the US’s European allies will continue to source oil and gas from Russia for now, natural gas prices on the continent already hit record highs earlier this week and are unlikely to temper with the US and UK sanctions. Europe’s decision to hold back on an oil ban has alleviated some fears that Russia would retaliate by cutting off gas to the continent, which would bring prices up even higher.

Leave a Reply

Your email address will not be published. Required fields are marked *