Thursday, December 8

The US is already talking to Europe to ban the purchase of Russian oil

The US President Joe Bidenannounced this Tuesday a Russian energy import ban to your country. That ban, which affects the oil, liquefied natural gas and coalrepresents an escalation in the aggressive punitive measures against Russia for the invasion of Ukraine and Biden has adopted it in consultation with European allies but without them, since Europe much more dependent that the US from Russian fossil fuels rejects a similar ban for now.

“Is another one powerful blow to (Vladimir) Putin’s war machine“, Biden said at the White House when making his announcement, admitting that the new sanction will push fuel prices even higher and has also acknowledged thatmany of the European allies will not be able to join” to punishment. “We can take this step and not others but we are working closely with Europe and our partners to develop a long term strategy so that they also reduce their dependence on Russian energy,” he said.

Softer measures in Europe

At United Kingdomthe Minister of Business and Energy, Kwasi Kwarteng, announced on Tuesday a phased plan that will end end of the year with the end of imports of crude oil and refined products Russians. The measure for now does not affect the gasbut Kwarteng has said that they are “exploring options“to put an end to those imports as well.

The European Comission, meanwhile, has presented a plan to reduce Russian gas imports by two thirds this year. “We must become independent from Russian oil, coal and gas,” he said in a statement. Ursula von der Leyen. “We just can’t rely on a vendor that explicitly threatens us.”

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It is easier for the Washington Administration than it is for Europe to adopt the ban. The crude in Russian represented only the 3% of what the US imported in 2021 and when they come together all crude oil and petroleum products those Russian imports were last year around 8% of the total, which in the US come mainly from Canada, Mexico and Saudi Arabia. On Europeon the other hand the raw russian is the 27%. In terms of gas naturally the divergence is even greater: while America doesn’t care of Russia, in Europe represents the 40%, and in Germany it reaches 50%.

Congressional pressure

Biden has assured that his veto has “strong bipartisan support in Congress and in the country”, where opinion polls ratify the citizen support to the ban. But in his decision has weighed especially the chamber pressurewhere a legislative proposal to veto imports of crude oil and suspend trade relations with Russia and Belarus.

This bill has garnered support from both the Democratic and Republican Parties, reinforced after representatives and senators maintained a conference on the weekend with the Ukrainian President Volodymyr Zelensky that urged them to adopt the ban. Nancy Pelosi is going to put it to a vote this Tuesday in the Lower House and, although the action in the Senate will be pending, Biden has wanted to get ahead of the legislature.

Impact in the US

The step taken by Biden has a potential political impact for the Democrat, who eight months before the elections legislative mid-term president faces a complicated moment by frustration citizen with the strong inflation. This price increase, the largest in four decades in the US, is partly motivated by the rise in fuel costs, which, as Biden has recognized, are going to rise even more, like volatility, with the new sanctions. The price of gasoline in a country dependent on the car has exceeded four dollars per gallon.

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Other steps taken by Biden also place him in politically swampy waters. The critics they intensify from Republican ranks but also from their own party after it was confirmed that over the weekend two senior officials from their government met with representatives of the government of Nicolás Maduro in Caracas, in an attempt to approach Venezuela as part of the strategy to mitigate the economic, political and diplomatic blow of the sanctions against Russia.

Russian reaction

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The Russian response to Washington’s announcement remains to be seen, but progress could already be made on Monday, when Alexander Novak, Deputy Prime Ministerwarned that “it is totally clear that the rejection of Russian oil would lead to catastrophic consequences for the global market” and threatened to cut off the supply of a gas pipeline to Germany.

Even before the invasion, the energy exports represented a third of the income of the Russian Governmentand the sector has become more lucrative even with rising prices since the invasion began. Russia is the world’s third largest producer of crude oil, responsible for more than 10% of global production, and the second oil exporter after Saudi Arabia, responsible for 7% of the global market and half of Europe’s. It is also the largest exporter of natural gas.

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