U.S. Keeps Secondary Sanctions Option Open for Russian Oil Importers
- May 20, 2022
- Posted by: Quatro Strategies
- Category: Energy
The Biden Administration has kept the possibility open for imposing sanctions on countries that import Russian oil amid Moscow’s invasion of Ukraine. Still, the United States has been concerned about its impact on oil markets.
So far, Britain and Canada, along with the U.S., have sanctioned purchases of Russian oil. But Washington has stopped short of placing secondary sanctions on countries that buy Russian oil, contrary to the measures on countries that buy Iranian oil.
U.S. Energy Secretary Granholm said it was the Treasury Department and State Department’s decision whether to place those sanctions. The Department of Energy can only act as an advisor in regards to their effects on global oil prices.
India and China are among the big buyers of Russian oil since the invasion Ukraine has been launched.
India, the world’s No. 3 oil importer, boosted Russian oil imports in April to about 277,000 barrels per day, up from 66,000 bpd in March as refiners snap up cheaper oil shunned by many Western countries and companies. China is also picking up heavily discounted Russian oil.
Granholm further stated that secondary sanctions “is certainly not off the table”.
But such a measure would further drive oil prices up, especially at a time when the U.S. has been dealing with high gasoline prices that recently reached a new record despite Washington’s move to release record amounts from the strategic reserves. The high prices worry Biden and the Democratic Party ahead of the midterm elections in November.
Granholm said the first set of Western sanctions on Russia has pulled about 1.5 million barrels per day (bpd) off global markets and EU plans to phase out Russian oil and refined products could remove another 1.5 million bpd by the end of the year.
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