WASHINGTON: The United States and Britain announced Tuesday they are cutting off imports of Russian oil, in the most far-reaching action yet by Western allies to punish Moscow for invading Ukraine, pushing the main US contract, WTI, rose by 6.7 percent to $127.44 per barrel and Brent by 6.8 percent to $131.63.
President Joe Biden announced a ban on US imports of Russian oil in the administration's most far-reaching action yet to punish Moscow for invading Ukraine. The "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 (President Vladimir) Putin," Biden said in an address from the White House, adding that the decision was taken "in close consultation" with allies.
Moscow warned earlier that in retaliation for sanctions it could cut off natural gas supplies to Europe via the Nord Stream 1 pipeline. Britain said it would also phase out Russian oil by the end of the year and the EU planned to slash gas imports by two-thirds, as Western sanctions finally began to target the economic lifeline for Russia's war.
Biden said Russia would be unable to ever control all of Ukraine, vowing the war would "never be a victory" for President Vladimir Putin. "Russia may continue to grind out its advance at a horrible price but this much is already clear -- Ukraine will never be a victory for Putin," Biden said. "Putin may be able to take a city, but he'll never be able to hold the country." The move followed, according to the White House after Biden spoke to French President Emmanuel Macron, German Chancellor Olaf Scholz and British Prime Minister Boris Johnson on Monday, and that “the leaders affirmed their determination to continue raising the costs on Russia” for its invasion of Ukraine. The US is not highly dependent on Russia for its energy supplies, importing an average of 209,000 barrels per day of crude oil in 2021 – or 3 percent of the country’s total crude imports, according to the American Fuel and Petrochemical Manufacturers trade association. Western countries, especially European nations that rely on Russian oil and gas for a large share of their energy needs, have hesitated amid fears a ban would cut them off from much-needed supplies and send prices skyrocketing.
Biden acknowledged that saying the US understands that many of its European allies “may not be in a position” to impose a similar ban. “The United States produces far more oil domestically than all the European countries combined,” the US president said. “We can take this step when others cannot, but we’re working closely with Europe and our partners to develop a long-term strategy to reduce their dependence on Russian energy, as well.”
Addressing the snowballing humanitarian crisis, Biden promised the United States would stand by its allies. "The United States will share in the responsibility of caring for the refugees so that the costs do not fall entirely on the European countries bordering Ukraine. Putin's war has caused an enormous suffering and needless loss of life -- of women, children, everyone," Biden said, accusing the Russian leader of targeting civilians indiscriminately -- in schools, hospitals and apartment buildings. "But Putin seems determined to continue on his murderous path no matter the cost."
US officials say Washington's overarching goal is to confine the conflict to Ukraine to avoid spillover that could provoke Putin into a direct -- and potentially nuclear -- confrontation. With US intelligence officials now believing Russia is digging in for a protracted war, Washington's priority is to pump military assistance into Ukraine's resistance to help it fight back."We're going to continue to support the brave Ukrainian people as they fight for their country," Biden said, promising to "support them against tyranny, oppression, violent acts of subjugation.""When the history of this war is written, Putin's war on Ukraine will have left Russia weaker and the rest of the world stronger," he vowed.
In reaction, Wall Street, the Dow was down 0.6 percent in late morning trading. Commodity prices also felt the effects of the growing isolation of Russia. The London Metal Exchange suspended trade in nickel after the base metal spiked to a record $101,365 per tonne as Russian supply concerns sparked sharp volatility. The rise in oil prices pulled the rug out from under a rebound in European and US equity prices. While London managed to squeak out a gain of 0.1 percent, Frankfurt ended the day flat and Paris shed 0.3 percent.