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Russia warns of global repercussions to US ban on Russian oil imports

Moscow has criticized the US decision to impose a blanket ban on the import of Russian crude oil and has warned that it could have global repercussions.

New York, 9 March 2022 (dpa/MIA) — Moscow has criticized the US decision to impose a blanket ban on the import of Russian crude oil and has warned that it could have global repercussions.

The ban, announced by US President Joe Biden on Tuesday, is yet another sanction on Russia due to its invasion of Ukraine.

“The US sanctions pressure on Russia has long crossed all the boundaries of political and economic sense,” the Russian embassy in Washington wrote on its Facebook page.

“As usual, the United States does not give a thought to the fact that restrictions are always a double-edged weapon,” it said.

The statement added that it was “obvious that the rejection of our resources will lead to significant fluctuations in the global energy markets. It will negatively affect the interests of companies and consumers, primarily in the United States itself.”

Oil prices have already surged following Washington’s ban and British plans to phase out Russian oil imports by the end of the year, amid Moscow’s escalating bombardment of Ukraine.

A barrel of North Sea Brent cost $131.41 on Tuesday, up $8.21 on the previous day, while the price of a barrel of US West Texas Intermediate (WTI) rose by $7.91 to $127.21.

The price of a barrel of Brent peaked briefly at $139 while WTI reached more than $130 on Monday.

There was “widespread bipartisan support” for the measure to further deprive Russian President Vladimir Putin “of the economic resources he uses to continue his needless war of choice,” a White House statement said.

Washington said the decision had been made in close consultation with allies and partners, but acknowledged that the US “is able to take this step because of our strong domestic energy infrastructure and we recognize that not all of our Allies and partners are currently in a position to join us.”

While Britain also plans to phase out Russian oil imports by the end of 2022, EU countries are not planning to introduce a similar ban, German Economics Minister Robert Habeck said, due to the region’s greater reliance on Russian energy.

However, the European Commission has announced new plans to free EU countries from their dependency on Russian energy sources before 2030.

A supplier that “explicitly threatens” the European Union cannot be relied on, Commission President Ursula von der Leyen said in a press release earlier.

The plans call to accelerate the EU’s expansion of renewable energy sources, replace Russian gas with new suppliers, especially of liquefied natural gas (LNG) and reduce energy consumption in the bloc. The commission said the measures can reduce EU demand for Russian gas by two thirds before the end of 2022.

“Putin’s war in Ukraine demonstrates the urgency of accelerating our clean energy transition,” said European Commission vice president in charge of environment Frans Timmermans in a press release.

Russia openly threatened to halt gas supplies to Europe for the first time since the invasion in comments by deputy prime minister Alexander Novak to state television on Monday.

The EU relies heavily on Russian fossil fuels. Some 90% of the gas used in the EU is imported, according to the commission, with Russia providing 45% of those imports at various levels to EU member states in 2021.

The EU executive arm said Russia also accounts for nearly 25% of oil imports and 45% of coal imports.

A growing number of voices called for a complete embargo on Russian energy imports, to persuade the Kremlin to end its attacks.

Earlier, the Italian government said it would replace Russian gas, anticipating supply difficulties.

Bulgaria, heavily dependent on Moscow for energy, however, ruled out an embargo. “Things we cannot afford to do is to stop importing oil and gas,” Prime Minister Kiril Petkov told journalists on Tuesday.

Under the commission’s plans, EU gas storage facilities are to be filled to at least 90% capacity by October every year before the start of the cold season, up from 80% capacity in an earlier draft seen by dpa.

The EU executive plans legislation in April to make this measure obligatory. A commission spokesperson said facilities were currently at less than 30% capacity on average.

In the search for new sources of gas, the focus is on suppliers of LNG from the US and Qatar. Azerbaijan, Algeria, Norway are also identified as suppliers in the commission’s plans.

Talks are under way with major LNG buyers including Japan, South Korea, China and India, to divert surplus supplies to Europe by sea route as a medium-term solution, according to the commission.

The plan also includes a “renewable energy pact” to reduce the use of gas and boost the expansion of solar, wind and hydro power. Approval procedures for renewable power projects are to be accelerated and new investors sought, the commission said.

Even if Russian gas continues to flow, energy prices are likely to remain elevated this year, and the commission is calling on member states to protect consumers and companies with measures such as a limited regulation of prices and targeted financial support.

OPEC Secretary General Mohammed Barkindo has warned that global oil production would not be enough to compensate for a complete shortfall in Russian supplies.

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