The U.S. and its European allies are discussing a possible ban of Russian oil imports to tighten the economic squeeze on President Vladimir Putin over the war in Ukraine, Secretary of State Antony Blinken said.
President Joe Biden’s administration, wary of pushing up energy prices for Americans, faced further pressure from Congresstoday to impose an embargo. Blinken, who said he discussed the matter with Biden on Saturday, said oil supplies would have to be ensured if such a measure were imposed.
“We are now in very active discussions with our European partners about banning the import of Russian oil to our countries while, of course, at the same time maintaining a steady global supply of oil,” Blinken, who held talks in Eastern Europe on Sunday, said on NBC’s “Meet the Press.”
Oil prices, meanwhile, roared above $135 a barrel today at the start of what is set to be another tempestuous week as the White House consideration of an embargo is likely to fan supply fears in an already jittery market. Prices of Brent crude jumped as much as 18% to $139.13, building on last week’s 21% surge as Russia’s invasion of Ukraine triggered fears of a brutal supply crunch, before paring gains.
Discussions on the possible impact of a ban on U.S. imports of Russian crude are taking place within the Biden administration and with the U.S. oil and gas industry, people familiar with the matter said last week.
Democratic Sen. Joe Manchin, who’s in a bipartisan group of lawmakers backing a bill to impose the restriction, suggested today that the U.S. go it alone.
“I believe … it’s basically foolish for us to keep buying products and giving profit and giving money to Putin to be able to use against the Ukrainian people,” Manchin said on NBC, pointing to what he said are untapped resources in the U.S. energy sector. “So why wouldn’t we lead? Why wouldn’t we show the resolve we have?”
Senate Majority Whip Dick Durbin, the chamber’s second-ranking Democrat, added his name to the bill today.
An embargo could extend crude’s record gain last week. Vitol Group, world’s biggest independent crude trader, said the oil market could tighten further with disruptions to Russian flows and as producers such as Libya experience supply problems.
Russian oil made up about 3% of all the crude shipments that arrived in the U.S. last year, U.S. Energy Information Administration data show. U.S. imports of Russian crude in 2022 have dropped to the slowest annual pace since 2017, according to the intelligence firm Kpler.
When other petroleum products — such as unfinished fuel oil that can be used to produce gasoline and diesel — are included, Russia accounted for about 8% of 2021 oil imports, though those shipments have also trended lower in recent months.
“I think there’s very strong bipartisan support to cut off Russian oil and gas sales to the United States,” Rep. Adam Schiff, a California Democrat, said on CBS’s “Face the Nation.”
Russia’s gas and oil have been mostly excluded from sanctions introduced by the U.S. and European countries, due to concern over the economic impact, including Europe’s greater dependence on Russian oil and, in particular, natural gas.
European Commission President Ursula von der Leyen hinted at the difficulty of reducing the European Union’s dependence on Russian fossil fuels in the short term.
“We are just discussing in the European Union a strategic approach, a plan, how to accelerate the investment in the renewables, how to diversify our energy supply,” she said on CNN’s “State of the Union” on Sunday. That could include liquefied natural gas from the U.S. and “other friends around the world” and investment in biogas and hydrogen, she said.
Efforts to target Russian oil revenues are a likely to be a balancing act with U.S. midterm elections in November.
“I think the White House is open to this idea,” Sen. Chris Murphy, a Connecticut Democrat, said on “Fox News Sunday.” “They just want to make sure that it’s done in a way that doesn’t dramatically increase prices for American consumers.”
“I just would much rather do it with the Europeans,” Murphy said.