President Joe Biden announced a ban on US imports of Russian oil on Tuesday, in the administration’s most far-reaching action yet to punish Moscow for invading Ukraine.
“We’re banning all imports of Russian oil and gas and energy. That means Russian oil will no longer be acceptable at US ports and the American people will deal another powerful blow to (President Vladimir) Putin,” Biden said in an address from the White House, adding that the decision was taken “in close consultation” with allies.
The ban came with Democrats threatening legislation to force Biden’s hand, despite the likely impact on already soaring gas prices.
Meanwhile, Britain also said Tuesday it would phase out Russian oil imports by the end of this year, in line with new sanctions announced by the United States following the invasion of Ukraine. “This transition will give the market, businesses, and supply chains more than enough time to replace Russian imports -– which make up 8.0 percent of UK demand,” Business Secretary Kwasi Kwarteng tweeted.
The oil sanction does not apply to Russian natural gas, which accounts for some four percent of the UK supply. But Kwarteng said he was “exploring options to end this altogether”. The announcement came in coordination with an embargo on Russian oil announced by US President Joe Biden.
Notably, prices of nickel have soared over 100% in the last few days as the Russia-Ukraine war has triggered a shortage of metal, threatening to disrupt the production of batteries for electric vehicles. Russia supplies the world with about 10% of its nickel needs.
The increased prices may also drag the margins of the EV industry. Nickel prices soared by as much as 111% on March 8, momentarily surpassing $100,000 per tonne. The London Metal Exchange (LME) halted trade due to the surge when three-month nickel was up 66 percent at $80,000 per tonne.
Indications of the impending ban had early on March 8 sent the Brent crude skyrocketing to around $140 a barrel, the highest in 14 years. The last record high was $147 in 2008.
Markets were reacting to US Secretary of State Antony Blinken telling news channels, “We are now talking to our European partners and allies to look in a coordinated way at the prospect of banning the import of Russian oil while making sure that there is still an appropriate supply of oil on world markets.”
Announcing the measures targeting the energy sector that props up the Russian economy and its war effort, Biden said Ukraine would “never be a victory” for Russian President Vladimir Putin. He said the ban was decided “in close consultation” with allies, especially those in Europe, who depend on Russia for 40 percent of their gas needs.
Oil rose towards $130 a barrel on Wednesday, supported by the concern of a potential supply shock as the United States banned Russian oil imports and amid signs that some buyers are already steering clear.
The United States on Tuesday imposed a ban on Russian oil imports, Britain said it would phase them out and Shell said it would stop buying Russian crude. JP Morgan estimated around 70% of Russian seaborne oil was struggling to find buyers.
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