US weighs sanctions on Russian oil and gas, but says time is not right now

The administration warned it could block Russian oil if Moscow heightens aggression against Ukraine. PHOTO: AFP

WASHINGTON(REUTERS) - The United States is open to imposing sanctions on Russia's oil and gas flows but going after its exports now could help Moscow, the White House said on Wednesday (March 2) as oil prices surged to a new 11-year high and supply disruptions mounted.

After Russia's invasion of Ukraine, the White House slapped sanctions on exports of technologies to Russia's refineries and the Nord Stream 2 gas pipeline, which has never launched.

So far it has stopped short of targeting Russia's oil and gas exports as the Biden administration weighs the impacts on global oil markets and US energy prices.

"We don't have a strategic interest in reducing global supply of energy... that would raise prices at the gas pump for Americans," spokesman Karine Jean-Pierre said at a White House news briefing.

The administration warned it could block Russian oil if Moscow heightens aggression against Ukraine.

"It's very much on the table, but we need to weigh what all of the impacts will be," White House spokesman Jen Psaki told MSNBC earlier on Wednesday.

National Economic Council Deputy Director Bharat Ramamurti told MSNBC that the White House does not want to make a move just yet.

"Going after Russian oil and gas at this point would have an effect on US consumers and actually could be counterproductive in terms of raising the price of oil and gas internationally, which could mean more profits for the Russian oil industry," he said.

"So we don't want to go there right now."

The Biden administration has taken pains to say it has not yet targeted Russian oil sales as part of sweeping economic sanctions it has slapped on Moscow since last week.

Even so, traders and banks have shied away from Russian oil shipments via pipeline and tankers, so as not to be seen as funding the invasion, sending energy markets into disarray.

And some US lawmakers pushed legislation that analysts said could lead to higher gasoline prices.

The top Democrat and a Republican on the Senate energy committee floated a bill that would prohibit the import of Russian crude, liquid fuels and liquefied natural gas.

The United States imported an average of more than 20.4 million barrels of crude and refined products a month in 2021, from Russia, about 8 per cent of US liquid fuel imports, according to the Energy Information Administration.

Democratic Senator Joe Manchin and Republican Senator Lisa Murkowski are working on getting support for their bill, a Manchin spokesman said.

And the United States slapped sanctions on Russia's oil refineries, banning the export of specific technologies, a move that could make it harder for Russia to modernise those plants.

Nearly one week after Moscow invaded Ukraine, US crude oil ended Wednesday at US$110.60 (S$149.82) per barrel, their highest close since May 2011, while global benchmark Brent settled at its highest since June 2014, at $112.93.

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Meanwhile, OPEC+ oil producers meeting on Wednesday agreed to stick to their modest output rises, offering little relief to the market or consumers.

On Tuesday, the US and its allies agreed to release 60 million barrels of oil reserves to help offset supply disruptions.

"We want to minimise the impact on the global market place ... and the impact of energy prices for the American people," Ms Psaki said.

"We're not trying to hurt ourselves, we're trying to hurt President Putin and the Russian economy."

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