US: Sanctions On Russian Energy On The Table

The United States is open to imposing sanctions on Russia’s oil and gas industry but going after its exports now could help Moscow, the White House said on Wednesday as oil prices touched eight-year highs and supply disruptions mounted.

The White House is considering hitting Moscow’s vast energy sector over Russia’s invasion of neighboring Ukraine, but the impacts on global oil markets and US energy prices are also key factors.

“We don’t have a strategic interest in reducing global supply of energy … that would raise prices at the gas pump for Americans,” spokesperson Karine Jean-Pierre said at a White House news briefing.

Biden’s administration has warned it could block Russian oil if Moscow heightens aggression against Ukraine. White House spokeswoman Jen Psaki said earlier on Wednesday that energy sanctions on Russia were under consideration.

“It’s very much on the table, but we need to weigh what all of the impacts will be,” Psaki reiterated.

The White House does not want to make a move just yet. Going after Russian oil and gas at this point would have an effect on US consumers and actually could be counterproductive in terms of raising the price of oil and gas internationally, which could mean more profits for the Russian oil industry. “So we don’t want to go there right now” according to National Economic Council Deputy Director Bharat Ramamurti.

Biden has taken pains to say it has not yet targeted Russian oil sales as part of sweeping economic sanctions it has slapped on Moscow since last week. read more

Even so, traders and banks have shied away from Russian oil shipments via pipeline and tankers, so as not to be seen as funding the invasion, sending energy markets into disarray.

And the United States is preparing a sanctions package targeting more Russian oligarchs as well as their companies and assets, a source familiar with the matter said on Wednesday. Previous sanctions have hit Russia’s banking sector, among other targets.

Oil prices reached a peak of nearly $114 a barrel on Wednesday, the highest level since 2014, nearly one week after Russia invaded Ukraine. There was little relief even after OPEC+ oil producers on Wednesday agreed to stick to their modest output rises.

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 place … and the impact of energy prices for the American people,” Psaki said. “We’re not trying to hurt ourselves, we’re trying to hurt President Putin and the Russian economy.”