African Reserves

Lawmakers push to ban Russian oil imports, despite White House resistance

WASHINGTON — Congressional Republicans and Democrats are pushing President Biden to ban Russian energy imports as they seek new ways to punish Moscow for its bloody invasion of Ukraine, even as the White House resists the idea, which she said would drive up gas prices and other energy costs for Americans.

The effort reflects a violent, bipartisan backlash on Capitol Hill against Russian President Vladimir V. Putin and his unprovoked offensive in Ukraine, an attack that killed thousands and sent 1 million Ukrainians fleeing their country in one week only.

The growing momentum behind the effort, which experts say would be largely symbolic, also underscored the few tools Congress and the White House have to find new ways to weaken Mr Putin.

Russian energy represents only a small fraction of US imports, and Moscow is already struggling to export its oil even in the absence of sanctions, as traders, insurance companies and refiners reduce their purchases by Russian crude for reasons ranging from reputational risk to tanker safety in a war zone.

Still, driving on Capitol Hill continued to gain support Thursday. He won his most prominent supporter in Speaker Nancy Pelosi, Democrat of California, who approved the move at his weekly press conference, telling reporters, “I totally agree. Ban it.

On the other side of the Capitol, 18 senators, split evenly between Republicans and Democrats, unveiled a bill to declare a national emergency and ban the import of Russian energy.

“There is a moral obligation here,” said Senator Lisa Murkowski, Republican of Alaska and co-sponsor of the bill, describing how Russian forces bombed hospitals, schools and residential buildings. “I don’t want US dollars funding this carnage in Ukraine.”

Many of the lawmakers most vocally calling for such a ban — and for helping U.S. oil producers fill the resulting vacuum by lifting restrictions on oil and gas drilling in the U.S. — were from either major producing states of oil and gas in the country. , or face tough re-election battles this year.

At the White House, Mr Biden and his advisers continue to resist calls for more aggressive sanctions on Russian oil, saying they fear it will drive up gas prices.

“Our goal and the president’s goal has been to maximize the impact on President Putin and Russia while minimizing the impact on us and our allies and partners,” said Jen Psaki, White House press secretary. . “We don’t have a strategic interest in reducing global energy supply, and that would increase prices at the pump for Americans around the world because it would reduce available supply.”

Senator Joe Manchin III, a West Virginia Democrat and lead author of the legislation to ban Russian energy imports, angrily dismissed that rationale, calling the statement “irresponsible” and adding, “They’re so wrong – so wrong”.

“When you talk about an inconvenience,” Mr. Manchin said on Capitol Hill, “can you imagine if you were living in Ukraine right now?”

Republicans have separately sought to tie the Biden administration’s opposition to both a ban on Russian gas and the opening of new wells at higher prices at the pump.

“It’s about replacing Russian oil with American and North American resources that this administration has choked out,” said Sen. Rob Portman, Republican of Ohio.

Ms Psaki added Thursday that the administration had not ruled out any options and was looking for ways to reduce US consumption of Russian energy, but only “in the context of maintaining a stable global energy supply.”

The 700,000 barrels of oil a day that the United States imports from Russia represents less than 4% of American consumption and about 14% of Russian oil exports. These lost barrels could be replaced by the planned release of strategic reserves and increased imports first from Canada, Brazil and Colombia, and eventually from African producers if necessary.

“That would basically make no sense,” said Michael C. Lynch, president of Strategic Energy and Economic Research. “Oil is fungible, and we’ll just import more oil from Africa and/or South America.”

He said a ban could see U.S. inventories run down for a week or two as refiners and traders replace Russian oil from other places.

That would temporarily raise prices at the pump, Lynch added, but those prices would likely rise anyway if the crisis continued.

Russia is already struggling to export its oil even in the absence of a US embargo. The price of Russia’s flagship Urals crude slumped as global refiners halted purchases of the country’s oil. Banks, insurance companies and tanker fleets are refusing to fund and transport Russian crude for fear of tougher sanctions. And the threat of an escalation of war is making shipping oil and other cargo across the Black Sea increasingly dangerous.

None of that stopped Republican lawmakers from pressuring Mr. Biden to open up the national drill. They chose to do so as a way to both flatter Mr. Putin and seize an economic opportunity at home.

“Never in the history of war have we had the opportunity to strike such a decisive blow,” Senator Lindsey Graham, Republican of South Carolina, said Wednesday at a press conference. “Let’s land this shot. If the Ukrainians can stand up to a tank, if a grandmother can have a gun, we can certainly produce more oil and gas.

U.S. oil producers have slowly ramped up production in recent months, while adding dozens of new rigs to drill for oil and natural gas, particularly in the Permian Basin straddling Texas and New Mexico. But oil production remains below 2019 levels before the pandemic, which slowed the economy and energy exploration and production.

Oil executives, under pressure from investors, have been reluctant to increase production to much higher levels, as in the past such moves have flooded the market and depressed commodity prices. Instead, oil executives returned recent profits to shareholders in the form of increased dividends while buying back shares to boost their stock prices.

A strong proponent of this strategy has been Scott D. Sheffield, the managing director of Pioneer Natural Resources, one of the leading producers in the Permian Basin. In an interview on Thursday, he changed his position slightly in light of Russia’s invasion of Ukraine.

Mr Sheffield said his company still aims to increase production by a modest 5% a year over the next few years. But he added: “If there is a coordinated effort by all Western countries to ban Russian oil and gas exports, we would be part of helping Europe increase our production over the next two to three years.” .

He warned, however, that such efforts would take time, noting that the industry was crippled by a shortage of labor and sand needed for the hydraulic fracturing process used to extract gas from hard shales. “When you add a rig, it takes six months to extract your first drop of oil,” he added.

The United States currently produces nearly 12 million barrels of oil per day, about 60% of domestic demand, and is now a net exporter of oil and natural gas.

Michael D. Shear contributed report.