US bans Russian oil, UK to follow by end of 2022

The United States of America will stop importing Russian oil, liquefied natural gas, and coal. According to President Biden, this is to inflict economic pain and drastically reduce the resources needed by President Putin to fund his invasion of Ukraine.

In 2021, the USA imported almost 700,000 barrels per day of crude oil and refined petroleum products from Russia. At current prices of USD 130 per barrel, Putin is set to lose billions immediately.

More than 70% of Americans agree with the decision made by President Biden even if it meant that fuel prices will rise stateside. Fortunately for them, the US isn’t fully dependent on Russian oil as it only covers 10% of the country’s demand.

To soften the impact of this move on fuel prices and consumer goods, the US government has committed to releasing more than 90 barrels from the Strategic Petroleum Reserve. This comes just after 30 million barrels were put on sale last week.

Across the pond, Britain will only start phasing out Russian oil and its by-products by the end of the year. The reason is that 70% of their oil needs come from Russia. In fact, the UK hasn’t even included natural liquefied gas yet as it accounts for 4% of the country’s supply.

Other European allies considering the same move are Belgium, France, Italy, Luxembourg, the Netherlands, and Germany.

With the US banning the importation of oil from Russia, what does this mean for the price of oil per barrel? According to data gathered by J.P. Morgan, the price of oil could reach USD 185 per barrel by the end of 2022, a significant jump from the current USD 130 per barrel. With gas companies like Shell, Exxon Mobil, and BP Petroleum planning to sell holdings in Russia, the likelihood of oil prices skyrocketing is not far off.