December 5, 2022

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US Weighs Sanctions On Russia's Energy Flows, But Time 'Not Now'

US Weighs Sanctions On Russia’s Energy Flows, But Time ‘Not Now’

White House Press Secretary Jen Psaki holds a press conference on the US response after Russia launched a large-scale military operation against Ukraine, at the White House in Washington, US, February 24, 2022. REUTERS/Lea Mehlis

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WASHINGTON (Reuters) – The White House said on Wednesday that the United States was open to imposing sanctions on Russian oil and gas flows, but that the pursuit of its exports now could help Moscow as oil prices jumped to 11-year highs. Supply disruptions escalated.

After the Russian invasion of Ukraine, the White House imposed sanctions on technology exports to Russian refineries and the Nord Stream 2 gas pipeline, which was never launched. So far, it has stopped short of targeting Russian oil and gas exports as the Biden administration weighs the effects on global oil markets and US energy prices.

“We have no strategic interest in reducing global energy supply…that would raise prices at the gas pump for Americans,” company spokeswoman Karen-Jean-Pierre said at a White House briefing.

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The administration has warned that it may block Russian oil if Moscow escalates its aggression against Ukraine. “It’s very moot, but we need to assess all the impacts,” White House spokeswoman Jen Psaki told MSNBC earlier on Wednesday.

National Economic Council Deputy Director Bharat Ramamurti told MSNBC that the White House does not want to make a move yet.

“Going after Russian oil and gas at this point will have an impact on American consumers and may actually be counterproductive in terms of raising oil and gas prices internationally, which could mean more profits for the Russian oil industry,” he said.

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“So we don’t want to go there now.”

The Biden administration has made an effort to say it has not yet targeted Russian oil sales as part of the sweeping economic sanctions it has imposed on Moscow since last week. Read more

However, merchants and banks turned away from Russian oil shipments via pipelines and tankers, so as not to be seen as financing the invasion, creating chaos in energy markets. Read more

Some US lawmakers have pushed legislation that analysts said could drive up gasoline prices.

The top Democrat and Republican member of the Senate Energy Committee has introduced a bill that would ban the import of Russian crude, liquid fuels and liquefied natural gas. The United States imported an average of more than 20.4 million barrels of crude and refined products per month in 2021, from Russia, about 8% of U.S. imports of liquid fuels, according to the Energy Information Administration.

A Manchin spokesperson said Democratic Senator Joe Manchin and Republican Senator Lisa Murkowski are working to get support for their bill.

The United States has imposed sanctions on Russian oil refineries and banned the export of certain technologies, a move that could make it difficult for Russia to modernize those plants. Read more

Almost a week after Moscow invaded Ukraine, US crude closed on Wednesday at $110.60 a barrel, its highest close since May 2011, while Brent crude settled at its highest level since June 2014 at $112.93. Read more

Meanwhile, OPEC+ oil producers agreed at their meeting on Wednesday to stick to their modest production increases, providing little comfort to the market or consumers. Read more

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On Tuesday, the United States and its allies agreed to release 60 million barrels of oil reserves to help offset supply disruptions.

“We want to minimize the impact on the global market… and the impact of energy prices on the American people,” Psaki said. We are not trying to harm ourselves, we are trying to harm President Putin and the Russian economy. “

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Additional reporting by Doina Chikau, Timothy Gardner, Susan Heffy and Valerie Volcovici; Written by Timothy Gardner, Editing by Louise Heavens and Alistair Bell

Our criteria: Thomson Reuters Trust Principles.