ExplainerUkraine war: what does a US ban on Russian oil accomplish?
- Because US imports are small, Moscow could shift exports to China or India; an embargo would be most effective if European nations joined in
- Oil prices could go as high as US$160 or even US$200 a barrel if buyers continue shunning Russian crude, analysts warn
With Russia intensifying its war on Ukraine, killing civilians and triggering a mass refugee crisis, President Joe Biden on Tuesday announced a US ban on imported Russian oil. Critics of Russia have said that sanctioning its energy exports would be the best – perhaps only – way to force Moscow to pull back.
A full embargo would be most effective if it included European allies, which are also desperate to stop the violence in Ukraine and the danger Moscow poses to the continent.
It is far from clear that all of Europe would take part in an embargo, although Britain announced on Tuesday that it would phase out Russian oil imports by year’s end.
Unlike the US, Europe is deeply reliant on energy it imports from Russia, the world’s second-largest crude oil exporter behind Saudi Arabia. While the US could replace the relatively small amount of fuel it receives from Moscow, Europe could not, at least not any time soon.
What’s more, any curbs on Russian oil exports could send already skyrocketing oil and petrol prices ever higher on both continents and further squeeze consumers, businesses, financial markets and the global economy.
Here is a deeper look.