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White House Considering Ban on Russian Oil Imports to U.S. -Breaking

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© Bloomberg. One of the towers used to crack petroleum at Nizhny Novgorod’s refinery. Source:

(Bloomberg). — As Congress races to pass a ban against U.S. imports Russian, the Biden administration weighs banning Russian imports. This is in response to Russia’s invasion of Ukraine.

According to sources familiar with the situation, conversations are ongoing within and between the U.S. Oil and Gas Industry and the Administration about the potential impact on American consumers as well as the global supply. According to a spokesperson for the White House, no decision was made.

According to data provided by the U.S. Energy Information Administration, Russian crude oil accounted for only 3% of the total crude shipments into the United States last year. Kpler intelligence reports that the U.S. has imported Russian crude oil at a slower pace than in 2017.

Russia accounts for around 8% in 2021 oil imports if you include other petroleum products, like unfinished fuel oil which can be used as feedstock to produce gasoline, and diesel. But, those shipments are trending lower lately.

Cutting consumption of Russian energy isn’t the only move the administration is considering. A person who was present at the meetings said that Russia’s financial situation is acute. Stock trading has been halted, the ruble has crashed, corporate and sovereign debt is all in danger. 

The White House has been weighing the consequences of an oil ban. It is trying to determine if it would really hurt Russia’s economy or if crude will simply move on to other markets, driving up U.S. gasoline costs.

According to AAA, the average cost of a gallon regular unleaded gasoline was $3.84 on Thursday. As of 1:14 p.m., New York’s average oil price was $115 per barrel.

“Any restrictions on Russian flows would cause pain exclusively on the side of the buyer because the Russians can easily place their fuel oil in China or India,” said David Wech, chief economist at oil-data provider Vortexa Ltd. “That would put the U.S. in a difficult position because of the impact on gasoline prices,” he said.

Senate Democrats Joe Manchin from West Virginia and Lisa Murkowski from Alaska introduced legislation to block Russian oil and natural gas flow into America. House Speaker Nancy Pelosi joined the Republicans in supporting the bill. According to one person, President Joe Biden’s administration is closely in touch with Manchin regarding the proposed legislation. The Senate allowed the bypass of the committee process.

There’s discussion about the need to include a provision in the legislation introduced by Manchin and Murkowski about consulting with allies. 

Jen Psaki (White House Press Secretary) spoke out against it as recently as Thursday. 

“Our objective and the president’s objective has been to maximize impact on Russia while minimizing impact to us and our allies and partners,” Psaki said at a briefing Thursday. “We don’t have a strategic interest in reducing the global supply of energy, and that would raise prices at the gas pump for the American people, around the world.” 

But Psaki added: “We are continuing to look at other options we could take right now to cut U.S. consumption of Russian energy.” 

©2022 Bloomberg L.P.

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