President Joe Biden has declared a full ban on Russian oil and gas imports into the United States. The immediate impact will be higher motor fuel prices in the United States.
On March 8, the nationwide average price for a gallon of standard gasoline (petrol) was $4.173, up from $4.06 on March 7. The founder of Inflation Insights, Omair Sharif, told the New York Times that the national average gas price may hit roughly $4.50 this month, “provided we don’t move any further.” According to the Associated Press, if worldwide crude prices reach $160 a barrel or much higher, up to $200, the price might increase above $5 per gallon.
For a general comparison with India, the price per gallon is currently around Rs 362, or Rs 95 for a liter of petrol, which is almost the same as what Indians are paying at the pumps. Not only have all imports of Russian oil, LNG, and coal been halted, but any new American investments in Russia’s energy sector have been prohibited as well. Americans are also prohibited from investing in any foreign company that invests in Russian energy production.
The US restriction on Russian oil imports, on the other hand, has little immediate and short-term impact on Russia.
Russia supplied only around 8% of America’s oil and petroleum products imports. This amounted to around 245 million barrels per year or about 672,000 barrels per day. This is a small sum, and Moscow could easily compensate for the lost American business by selling to China or even India. However, due to the reduced pool of possible clients, it may be forced to provide substantial discounts. The United States does not receive any natural gas from Russia. The restriction would have a “limited” impact on Russia, according to the Associated Press.
“The cost of freedom and to the American people will be even larger tomorrow if we do not respond to Putin’s assault on global peace and stability now,” Biden added, promising to “do everything I can to reduce Putin’s price hike here at home.”
Some Republicans have advocated for the United States to enhance its domestic oil output. That, however, is a long-term solution that will not solve the present issue. It will also include a discussion of the United States’ environmental commitments, as well as a number of other complicated issues.