US Bans Russian Fossil Fuel Imports

US Bans Russian Fossil Fuel Imports

From Bloomberg this morning:

“the U.S. will ban imports of Russian fossil fuels including oil, a major escalation of Western efforts to hobble Russia’s economy that will further strain global crude markets.”

The UK has joined the US in part, with a ban on Russian Oil, but will continue to import Russian Gas and Coal. The EU have elected not to participate, hardly surprising given their significant reliance on Russian fossil fuels.

The ban is more symbolic than practical. The US only gets about 3% of its oil from Russian sources, so the ban won’t have a big impact on either side of the Atlantic. A fact reflected in the muted response to the announcement seen in oil prices today, which are still trading in the $125 to $130 range.

A EU ban would be much more impactful on Russia, but much harder for the EU to implement, given its significant reliance on Russian fossil fuels. The EU gets 27% of its oil from Russia and roughly 40% of its gas. There aren’t ready alternatives to the Russian supplies either, making immediate sanctions an expensive option for the EU. However, given time, there are options for the EU to wean itself off Russian energy imports and I expect the EU will accelerate this process over the next couple of years.

https://www.bloomberg.com/news/articles/2022-03-08/biden-says-u-s-will-ban-russian-fuels-to-pressure-putin-on-war?srnd=premium-asia