SBP holds policy rate, contradicts itself because fiscal policy justifies

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March 8, 2022: US President Joe Biden on Tuesday banned imports of Russian oil and other energy in retaliation for the invasion of Ukraine, underscoring strong bipartisan support for a move he acknowledged would push up US energy prices.

“We are banning all imports of Russian oil and gas energy,” Biden told reporters at the White House. “That means Russian oil will no longer be acceptable in US ports and the American people will inflict (Russian President Vladimir) Putin’s war machine again.”

Biden expressed America’s support for the Ukrainian people and predicted their eventual victory.

“Russia may continue to grind up its advance at a terrible cost, but this much is already clear: Ukraine will never be a victory for Putin. Putin may take a city, but he will never be able to hold the country,” he said. said.

Oil prices rocketed on the news with Benchmark crude Brent LCOc1 for May climbing 5.4% to $129.91 a barrel at 1345 GMT.

It was not immediately clear when the import ban would come into effect.

Biden has been working with allies in Europe, which are much more dependent on Russian oil, to isolate Russia and Putin’s energy-rich economies. Britain announced shortly before Biden’s comments that it would phase out imports of Russian oil and oil products by the end of 2022.

Biden said sanctions imposed by the United States and its allies have already “cracked” the Russian economy. He said the final steps have been taken in close consultation with allies and partners around the world.

Democrats face tough midterm congressional elections in November, when Biden’s way of dealing with the economy, especially rising prices, is expected to be the number one problem for voters.

The United States imported an average of more than 20.4 million barrels of crude and refined products from Russia per month in 2021, about 8% of U.S. liquid fuel imports, according to the Energy Information Administration, and the ban is expected to lead to high gasoline prices. and inflation is rising. The United States also imports a negligible amount of coal from Russia.

Retail prices for gasoline in the United States soared to a record Tuesday, and prices are expected to continue rising as the United States bans Russian oil imports. The average retail price of a gallon of gasoline was $4,173 early Tuesday, according to the American Automobile Association.

Biden predicted that prices would rise further as a result of “Putin’s war”, but promised to do everything to minimize the impact on the American people. He also warned US companies against abusing the situation to make a profit or push prices.

“Today’s decision here at home is not without costs. Putin’s war is already hurting American families at the gas station… I’m going to do everything I can to minimize Putin’s price hikes here at home,” Biden said.

“Russia’s aggression is costing us all. It’s not a time for profit,” said the Democratic president, who has repeatedly targeted major US corporations for unfairly inflating prices.

In November, Biden had cited mounting evidence of anti-consumer behavior by oil and gas companies and asked the Federal Trade Commission to dig deeper into possible “illegal behavior” in the market. Read the full story

Biden resisted accusations by Republicans that his administration’s policies curtailed U.S. energy production, noting that oil and gas companies had 9,000 licenses to drill onshore that they weren’t using.

“We are approaching a record (level) of oil and gas production in the United States and we are on track to record a record level of production next year.”

US Senator Chris Coons said the administration was coordinating with European allies “making sure we have laid the groundwork for understanding how to effectively implement a ban on Russian energy.”

“We’re going to see gas prices rise here in the United States. In Europe, they’re going to see dramatic price increases. That’s the price of standing up for freedom and standing next to the Ukrainian people, but it’s going to cost us,” said Coons. told CNN.

The White House had coordinated with congressional leaders to work on an accelerated bipartisan legislation to ban Russian imports, but the ban announced by Biden on Tuesday would make such a bill moot.

Biden said the crisis emphasized the importance of transitioning to a clean energy supply.

Republican lawmakers welcomed the decision on social media, criticized Biden’s green energy policies and urged the government to support more oil and gas production domestically.

US Representative Susan Wild said Americans need to realize the greater sacrifice that is needed. “Obviously no one wants to pay for gas anymore,” Wild, a Democrat on the House Foreign Affairs Committee, told MSNBC.

By announcing that it is phasing out imports of Russian oil and oil products by the end of 2022, Britain said it is giving the market and businesses more than enough time to find alternatives to imports, which account for 8% of demand .

“The government will also work with companies through a new Taskforce on Oil to help them exploit this period in finding alternative supplies,” said UK Secretary of State for Affairs and Energy, Kwasi Kwarteng.

Reuters


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