The United States imposed a complete ban on energy imports from Russia.

The corresponding decree on Tuesday, March 8, was signed by the President of the United States Joe Biden.

According to the document, oil, oil products, petroleum fuels and oils, as well as products of their distillation, produced in Russia, are prohibited from being imported into the United States.

In addition, Russian liquefied natural gas, coal and coal products were subject to restrictions.

It also introduces a ban on new investments in the energy sector of the Russian Federation.

“Today I am announcing that the United States has targeted the main artery of the Russian economy.

We are imposing a ban on all imports of Russian oil, gas and energy.

This means that Russian oil will no longer be able to enter US ports, ”Biden said during a speech at the White House.

The American president noted that the decision will hit the United States itself.

Nevertheless, the country's authorities are ready to take such a step, the president added.

Both Republicans and Democrats understand this.

Both Republicans and Democrats have made it clear that we have to do this,” Biden said.

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  • © Andrew Harnik

Recall that on February 21, Vladimir Putin announced the recognition of the independence of the DNR and LNR, and on the 24th he announced the start of a military special operation to protect the republics of Donbass from aggression from Ukraine.

In response, the European Union, the United States and a number of other states began to impose anti-Russian restrictions.

The restrictions affected the companies and banks of the country, and seven credit institutions were disconnected from the SWIFT international financial messaging system.

The sanctions also affected the aviation industry and the supply of high-tech products to Russia.

Half of the Central Bank's gold and foreign exchange reserves were frozen, certification of the Nord Stream 2 gas pipeline was stopped, and many Western companies announced their withdrawal from the Russian Federation.

However, until now, Washington has refrained from harsh sanctions against Russia's energy sector.

As the US authorities and representatives of the expert community have repeatedly noted, a ban on the supply of oil and other energy resources from the Russian Federation poses serious economic risks.  

On the eve of the threats of such a decision, Russian Deputy Prime Minister Alexander Novak also warned.

According to him, attempts to initiate such discussions undermine the fundamentals of the market, create uncertainties and lead to significant damage to consumers.

“If you want to refuse the supply of energy resources from Russia, please, we are ready for this.

We understand where to redirect these volumes.

Only the question arises: who benefits from this and why is it needed?

Novak said.

As Igor Yushkov, an expert at the Financial University under the Government of Russia, suggested in an interview with RT, by their actions the United States is trying to hit the Russian economy and force the country's leadership to change its foreign policy.

However, one skilled in the art does not expect such a result to be ultimately achieved.

According to him, today Russia is the sixth largest supplier of oil to the United States and shares the second place with Mexico in terms of exports of petroleum products to the United States.

Thus, as a result of the measures taken by Washington, both sides will have to reorient their trade flows, Yushkov said.

“Most likely, we will simply begin to supply raw materials to Asia more actively, and the Middle Eastern countries will send more of their oil to the United States.

Thus, there will be a redistribution of markets, which is not so scary.

However, as long as this rebuilding process continues, we may see major price fluctuations.

Quotes will be very high, which can have a rather painful effect on the United States, ”said Igor Yushkov.

A similar point of view in an interview with RT was expressed by Stanislav Mitrakhovich, an expert from the National Energy Security Fund.

In his opinion, Russian companies will suffer certain losses, but in general, the blow will not be significant for the industry.

“Is this situation critical for the Russian oil industry?

No, it's not.

We also cut larger volumes of production during the COVID-19 period.

Therefore, there is nothing catastrophic,” Mitrakhovich stressed.

the Forbidden fruit

It is noteworthy that over the past three years, the volume of supplies of crude oil and petroleum products from Russia to the States has grown by 79% and by the end of 2021 exceeded 245 million barrels.

The indicator became the highest in the history of observations, according to the Energy Information Administration of the US Department of Energy (EIA).

Experts interviewed by RT explain the high demand for Russian oil in the States by the peculiarities of its composition.

Thus, raw materials of the Urals brand are characterized by a high sulfur content, while, for example, the reference Brent or American WTI are considered lighter grades.

“Historically, many plants in the US are set up for heavy oil.

Previously, the Americans actively purchased such raw materials from Venezuela, but after Washington imposed sanctions on this country, the States switched to Russian Urals.

Today they buy it from us along with bitumen, fuel oil and diesel, dilute it in different proportions and get an analogue of Venezuelan oil,” said Igor Yushkov.

Recall that in January 2019, the United States imposed restrictions against the largest oil company in Venezuela - Petróleos de Venezuela, SA (PDVSA).

In total, Washington blocked the assets of the corporation for $ 7 billion, and the lost profits of PDVSA from sanctions in 2019 should have been $ 11 billion.

According to the EIA, as a result of the introduction of restrictions in 2019, Venezuelan oil exports to the United States fell by more than six times - from almost 214 million to 34 million barrels.

At the same time, in 2020, the United States completely stopped purchasing hydrocarbons from the Latin American country.

“Of course, there are still producers of similar grades of oil in the world, but it will be necessary to look for and arrange supplies.

The States may have to reconfigure their refineries.

However, all this takes time and money,” says Igor Yushkov.

Under the current conditions, in order to minimize losses, Washington may partially ease sanctions against Venezuela and try to increase the supply of heavy oil from the country again.

However, such attempts will not give the desired effect in the near future, Stanislav Mitrakhovich believes.

“The American delegation went to Venezuela, but there will not be an instant result in increasing production there.

Because, firstly, not everything has been agreed politically yet.

And secondly, because the infrastructure in Venezuela simply needs reconstruction,” the specialist explained.

burning question

The reaction of the world oil market to Joe Biden's statements followed immediately.

Thus, during the evening trading on Tuesday, the cost of Brent crude on the ICE exchange in London rose by 8% to $133.1 per barrel.

In total, since the beginning of 2022, a barrel of Brent on the global market has risen in price by almost 70%, and on March 7, its price briefly rose above $139 per barrel.

This has happened for the first time since July 2008.

According to Igor Yushkov, in recent days, market participants have seriously feared a ban on oil imports from Russia, which was the reason for the rush growth of quotations.

Now, according to the expert, after the US official decision, a new wave of panic may begin among consumers, and prices in the foreseeable future can exceed $150 per barrel.

A similar scenario is predicted by the Russian government.

Moreover, if the EU countries join the US oil embargo, the global energy market will face a serious blow, the Cabinet is sure.

“Supplies of oil and oil products from Russia today are the most competitive for the European market, given the developed oil pipeline infrastructure and logistics of sea supplies.

It is absolutely obvious that the rejection of Russian oil will lead to catastrophic consequences for the world market.

The surge in prices will be unpredictable - more than $300 per barrel, if not more," Alexander Novak said.

  • RIA News

  • © Alexey Maishev

The rapid rise in oil prices in the world has already led to a sharp jump in fuel prices in the United States.

The latest estimates from the American Automobile Association show that the price of regular unleaded gasoline hit a new all-time high and averaged $4.173 per gallon ($1.1 per liter) nationwide.

As Joe Biden himself admitted, the decision to stop buying oil from Russia will lead to an even greater rise in the price of gasoline for ordinary Americans.

Against this backdrop, the American president asked private companies not to inflate prices and exploit consumers.

“Russian aggression is costing us all dearly, and now is not the time for profit or price gouging.

I want to be clear that we will not tolerate this,” Biden warned.

However, a further rise in gasoline prices in the US is inevitable, experts believe.

As Igor Yushkov explained, compared to Russia, the cost of fuel on the American domestic market directly depends on oil prices.

This state of affairs can significantly hit the wallets of Americans and shake the position of the current administration, the expert believes.

“This is a very big blow to the Democrats.

Republicans will now take advantage of the situation and will actively criticize Biden along with his administration, since this was not the case under Trump.

The previous president did not allow such price jumps and supported the industry.

Therefore, the chances that the Democrats will retain the majority in parliament are declining,” Yushkov concluded.