While some lawmakers in Washington, D.C., are pushing for a ban on imports of Russian oil and petroleum products into the U.S., such a move likely wouldn’t have a huge effect on prices for Americans, according to one analyst.
“A ban on Russian crude and product imports would have a limited impact on prices, given flows of Russian energy to the U.S. are small in terms of total deliveries, and alternative sources could be found,” said Matt Smith, lead oil analyst for the Americas at data firm Kpler, in an email to MarketWatch.
“A number of the current imports are opportunistic purchases, rather than regular deliveries.”
The U.S. imported over half a million barrels per day of Russian crude and petroleum products last year, amounting to about 7% of total U.S. imports, according to Smith. “But that number was elevated because of the pandemic — the U.S. was a buyer of last resort because of weak demand in both Europe and Asia,” he said.
For Russian oil companies, a U.S. ban on their crude would have a limited effect as well, since Europe is their key market, while the U.S. is “only a small customer” for them, Smith said.
House Speaker Nancy Pelosi on Thursday threw her support behind a Senate bill that aims to ban the import of Russian oil and petroleum products into the U.S., as part of the Western response to Russia’s invasion of Ukraine.
“I’m all for that. Ban it,” the California Democrat told reporters during her weekly press briefing, when asked about the measure, which is being rolled out by Republican Sen. Lisa Murkowski of Alaska and Democratic Sen. Joe Manchin of West Virginia.
Similar legislation has been introduced by Democratic Sen. Ed Markey of Massachusetts. “We cannot stop Putin with Russian gas in our cars,” Markey said in a statement on Tuesday, referring to Russian President President Vladimir Putin.
The Biden administration for now is pouring cold water on banning Russian oil.
“We don’t have a strategic interest in reducing the global supply of energy,” White House press secretary Jen Psaki told reporters Thursday at a daily briefing. “Less supply raises prices.”
Psaki did not completely close the door on the issue, however, saying, “I don’t have any assessment of that for you,” when directly asked if the administration is moving closer to a ban.
U.S. officials have been indicating that Russian energy exports won’t be targeted by sanctions, but analysts have warned that they still could feel hits due to sanctions affecting payment transactions, Russian banks and possibly the insurance that covers Russian oil and gas deliveries.
“The U.S. doesn’t need to deter buyers, ‘self sanctioning’ is already underway,” Kpler’s Smith said, meaning that buyers are avoiding Russian crude “given the uncertainty surrounding it.”
“Shippers are not willing to move it, tankers are not willing to carry it, countries and companies are not wanting to take delivery of it, and insurance companies are not willing to insure it,” he said.