Oil Continues Surge as US Bans Russian Energy Imports
By Adedapo Adesanya
Oil further jumped on Tuesday as the United States announced a ban on Russian energy imports in response to the country’s invasion of Ukraine.
Brent crude oil traded higher by $3.22 or 2.5 per cent at $131.2 per barrel while the US West Texas Intermediate (WTI) was up by $2.51 or 2.0 per cent to sell for $127.3 per barrel after both benchmarks earlier jumped by 7 per cent on the news.
The ban, which was announced by the US President, Mr Joe Biden, includes not only Russian oil but also coal and liquefied natural gas (LNG).
“Today, I’m announcing the United States is targeting the main artery of Russia’s economy. We’re banning all imports of Russian oil and gas and energy. That means Russian oil will no longer be acceptable at US ports and the American people will deal another powerful blow to Putin’s war machine,” President Biden said in a White House announcement on Tuesday.
The President stressed that while the decision was made in close consultation with its European allies, noting that he understood not every ally would be in a position to join the United States in sanctioning Russia’s energy supplies.
This culminates reports which emerged that the US was considering banning imports of Russian oil without the participation of its European allies.
The US, which imports around 500,000 barrels per day of Russian crude and products, can afford to ban imports from Russia without severe consequences on its industry and economy, compared to Europe.
The United Kingdom announced its own restrictions on buying Russian oil imports while the European Union has made plans to reduce its dependence on Russian energy.
This will further deal a big blow to Russia as the market has already been self-sanctioning the Russian energy complex, with buyers avoiding the nation’s oil.
Meanwhile, the members of the International Energy Agency (IEA) are ready to release more oil from their strategic emergency reserves to tame the surging oil prices.
Last week, the IEA agreed that some of its members would release 60 million barrels of crude oil from various countries’ strategic petroleum reserves.
The US has agreed to release 30 million barrels of crude oil from its reserves. The rest of the IEA members in Europe and Asia will release the remaining 30 million barrels.