President Joe Biden is working on a plan to go after Russian oil and further cripple the country's economy, the New York Times reported Thursday. One major problem, however, is that the steps could anger India, China, Turkey and other nations that do continue to buy Russian oil.
The plan would issue secondary sanctions that push international oil buyers to comply with U.S. sanctions on Russia as they continue their invasion of Ukraine. Vladimir Putin's war against Ukraine has resulted in Russia losing nearly $20 billion each month that the oil continues from oil sales alone, the report said. The next steps are how to "starve Moscow of that money while ensuring that global oil supplies do not drop, which could lead to a rise in prices that benefits Mr. Putin and worsens inflation in the United States and elsewhere."
While the United States only took about 8 percent of its oil from Russia, the commodity exists in a global market, so when there are shortages in other countries that get greater amounts of oil from Russia, it means oil companies can sell their product to a higher bidder and make a more significant profit. It means the U.S. must compete with buyers on the global market by offering more money to buy oil. Meanwhile, the U.S. oil companies continue to score record profits.
There's the added problem that because oil costs are soaring, it means Russia too can jack up their prices. That has resulted in Russia making 50 percent more for the oil they're selling, a new report from the International Energy Agency in Paris explained.
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"While U.S. officials say they do not want to immediately take large amounts of Russian oil off the market, they are trying to push countries to wean themselves off those imports in the coming months," the Times explained. "A U.S. ban on sales of critical technologies to Russia is partly aimed at crippling its oil companies over many years. U.S. officials say the market will eventually adjust as the Russian industry fades."
“We very much support the efforts that Europe, the European Union, is making to wean itself off of Russian energy, whether that’s oil or ultimately gas,” said Secretary of State Antony Blinken in Berlin over the weekend. “It’s not going to end overnight, but Europe is clearly on track to move decisively in that direction.”
“As this is happening, the United States has taken a number of steps to help,” he also said.
Officials are trying to figure out ways to reduce the cash Russia is bringing in from selling cheaper oil, explained the sanctions policy expert who served in the State Department after Russia invaded Crimea. He noted the hope is that countries who aren't issuing sanctions "don't undercut them" just by buying more oil.