Why does Russia’s oil ban or can’t help make the US hard to say? The White House said Friday (March 4) that the administration is considering whether to ban Russian oil imports. Despite growing calls for sanctions against Russia, governments including the United States have been reluctant to let go of whether to ban Russian oil. Experts say the ban on Russian energy needs more countries to participate in order to be effective, and U.S. domestic energy output may not be able to quickly fill the gap created by the stop of Russian energy imports in the short term.
Why does Russia’s oil ban or can’t help make the US hard to say?
White House spokeswoman Shaqi told reporters Friday that the administration is considering a range of options to reduce its reliance on Russian energy. “You know, we don’t import a lot of oil from Russia, but we’re looking at options we can take if we want to reduce U.S. consumption of Russian energy.” “The most important thing is that we maintain a stable supply of global energy.” Shaqi said.
Democrats and Republicans in the U.S. House and Senate introduced a bill Thursday that would ban U.S. imports of Russian crude, oil, petroleum products, liquefied natural gas and coal. One of the bill’s sponsors, Sen. Lisa Murkowski, R-AK, R-Alaska, said at a news conference, “We will no longer send money to Russia to kill innocent people.” , “This bill will do just that”.
How powerful can U.S. sanctions on Russian energy be?
Thomas Duesterberg, a senior fellow at the Hudson Institute, a Washington think tank, told VOA, “The Russian economy is dominated by income from commodities such as oil and gas, and their hard currency is almost entirely Dominated by revenue from oil and gas sales to countries like the U.S., Europe and East Asia.”
If these Russian exports are unable to pay for their exports because other countries refuse to buy them, or are restricted by some form of sanctions, there is not much Russia can do to make up for them, and it would be a “deadly blow to its economy,” Dustberg said. hit”.
Ehud I. Ronn, a professor at the University of Texas at Austin School of Business and co-director of the Center for Energy Management and Innovation, told VOA that sanctions on Russian oil and gas production would reduce customers buying Russian energy quantity.
Ron said: “If sanctions were imposed on a broad range (not necessarily all) of Russia’s existing customers, there would be significant adverse effects on the Russian economy. Simply put, their natural resources are a major source of their export earnings. sources, which account for at least 77% of their exports, without which there will be an impact.”
Russian oil accounted for only about 3 percent of all crude oil imports that arrived in the U.S. last year, according to the U.S. Energy Information Administration. U.S. imports of Russian crude oil in 2022 have so far fallen to the lowest level since 2017, according to intelligence firm Kpler.
“In 2020, Russia’s crude oil and condensate exports to the U.S. accounted for only 1.48 percent of Russia’s exports,” said Ron, a professor at the University of Texas at Austin.
Although the U.S. is not a major importer of Russian energy, some experts say U.S. sanctions could have a big impact on Russia.
Joel Griffith is a research fellow in financial regulation at the Heritage Foundation’s Roy Institute. He told VOA: “In 2021, we will be importing about 600,000 barrels of oil and oil products from Russia per day, which is equivalent to $70 million worth of oil per day, and you can multiply that by a full year. So, What’s 70 million times 360 days? At that rate, it’s worth over $20 billion. The military budget of Russia as a whole is about $60 billion. So our oil imports alone are equivalent to nearly half of Russia’s military budget, which is a lot money.”
But many experts believe that sanctioning Russian energy requires other countries to join in.
“I would definitely be stronger if other countries joined,” Dustberg said. “If you look at the structure of Russia’s exports, it can be said that the countries it exports are mainly U.S. allies, including Japan, South Korea, Taiwan in Europe and East Asia. So if these countries join us in sanctioning Russia’s energy exports, it will be a big blow.”
He said Russia could feel the impact of sanctions within weeks.
At a White House news conference on Friday, a reporter asked Shaqi if the Biden administration was reluctant to impose sanctions on Russia’s lucrative energy industry because of Europe’s dependence on Russian energy. Shaqi said that the United States has taken steps from the beginning to coordinate with allies and partners in Europe, and “this remains the first principle of President Biden.”
“The focus of our European allies and ours is not to take measures that would increase volatility in the global oil market,” Saki said.
Without Russian energy, will the United States suffer from short-term pain or long-term pain?
BP announced it was giving up its stake in Russian oil giant Rosneft after Russia invaded Ukraine. Equinor, the Norwegian state oil company, also plans to pull out of Russia. Shell said on Monday it would exit all of its operations in Russia, including a large liquefied natural gas plant.
West Texas Intermediate crude was at $112 a barrel on Friday, 90% higher than a year ago.
The head of the largest U.S. shale oil operator said Scott Sheffield, chief executive of Pioneer Natural Resources, has joined calls for sanctions on Russia’s oil industry, the Financial Times reported on March 4. But he acknowledged that such a move could send crude prices soaring, with U.S. producers unable to quickly fill the supply gap.
“The only way to stop Putin is to ban oil and gas exports,” Sheffield told the Financial Times. “(But) if the Western world announces that we will ban Russian oil and gas, the price of oil will rise to $200 a barrel.”
Sen. Marco Rubio (R-FL), the vice chairman of the Senate Intelligence Committee, tweeted Friday, “America doesn’t need Putin’s oil, even if it’s sold at a deep discount. We have our (oil) , let’s make good use of it.”
Even electric car giant Tesla CEO Elon Musk said on Twitter, “I have to say we need to increase oil and gas production immediately. Extraordinary times require extraordinary measures.”
Musk’s tweet received nearly 20,000 retweets in just half an hour.
But some experts say U.S. domestic crude output won’t fill the void left by Russian oil anytime soon.
Seth Adam Blumsack, director of Penn State’s Center for Energy Law and Policy, told VOA: “I think the U.S. oil production capacity and technological capacity is quite substantial, [but] it’s not your Something that can flip a switch overnight and bring the intake down to zero. It takes some time because you have to deploy capital, you have to drill more wells, you’re going to have to lay more pipes. So it’s not It can be done overnight.”
Currently, Canada and Mexico are major crude oil importers to the United States. To alleviate high oil prices in the short term, the U.S. could turn to other sources of supply, Brussack said.
“Some of that extra supply could come from other countries, especially Saudi Arabia. Some of it could come from unconventional oil producers in the U.S.,” Brussack said.
In the long run, experts believe that the United States has more options to solve the energy problem.
“Renewable energy is going to become relatively more attractive, so people will get into the field.”
“We can be energy independent, and if we use the fossil fuels that are so abundant in the U.S., especially natural gas, we can still make progress toward our goals,” said Dustberg, a senior fellow at the Hudson Institute. Such as natural gas to produce more electricity to reduce the economy’s dependence on carbon, we can be self-sufficient, and we are almost certainly producing the oil and gas we need before Covid-19. We became a major exporter of both commodities .”
“If we unlock more productivity, especially gas and oil, we can reduce our reliance on unreliable suppliers, whether they are in Russia or the Middle East,” Dustberg added.