The U.S. has banned imports of Russian oil, President Joe Biden announced Tuesday, in a major escalation of economic sanctions intended to punish Russian President Vladimir Putin for his war in Ukraine.
Oil had been omitted from earlier sanctions to shield consumers from higher fuel costs, but with gas prices surging anyway and Congress likely to force the issue, Biden made the surprise announcement at the White House on Tuesday.
“We’re banning all imports of Russian oil and gas and energy,” Biden said. “That means Russian oil will no longer be acceptable at U.S. ports and the American people will deal another powerful blow to Putin’s war machine.”
It’s a perilous economic moment for an oil supply shock, with overall price inflation already at the highest level since 1982 and the Federal Reserve poised to pump the brakes on the economy, potentially risking a recession.
A bipartisan chorus of lawmakers, however, including House Speaker Nancy Pelosi (D-Calif.), had called on Biden to disallow Russian oil imports. Last week, Sens. Joe Manchin (D-W.Va.) and Lisa Murkowski (R-Alaska) introduced legislation that would impose a ban, and some version of the measure appeared likely to win approval in the coming days.
Russian oil amounted to 7% of imports in 2020, according to the U.S. Energy Information Administration, with purchases accelerating last year. The administration has hesitated to support a ban without buy-in from European allies that are much more dependent on Russian oil and gas.
Biden has also said he didn’t want to inflict higher gas prices on American drivers, saying in his State of the Union address last week he wanted to “make sure the pain of our sanctions is targeted at the Russian economy and that we use every tool at our disposal to protect American businesses and consumers.”
On Tuesday, Biden acknowledged the ban would cause price spikes, but sought to make sure people blamed Russia’s president, not America’s.
“The decision today is not without costs at home,” Biden said. “I’m going to do everything I can to minimize Putin’s price hike.”
Biden noted that the U.S. and Europe had coordinated to tap their strategic petroleum reserves and said oil and gas companies should not gouge consumers just because they are already expecting higher prices.
Less oil means higher fuel costs, and higher costs will increase inflation; motor fuel accounts for 2.8% of the consumer price index.
Manchin said Americans wouldn’t mind higher gas prices if that’s what it takes to stick it to Putin.
“The people in my state of West Virginia 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 Sunday on NBC’s “Meet the Press.”
Despite record job growth and low unemployment, high inflation has given Americans a strongly negative view of the economy. Still, 49% of voters said in a Morning Consult survey the government should sanction Russian oil even if it means higher gas prices.
The economy may already be feeling the oil sanctions, as traders preemptively avoided Russian crude in the expectation it would be banned later. Fuel costs have surged, with a gallon of gasoline costing more than $4 as of Monday, according to the American Automobile Association.