Metaphorically, it’s an economic target as large and sprawling as Russia itself — and it represents the biggest gap in the sanctions regime that the world has erected in response to that nation’s brutal invasion of Ukraine.
That, of course, is Russia’s energy sector.
Given that energy represents almost 60 percent of Russia’s exports, it’s too important a target to leave unscathed. That’s true both for symbolic reasons and for the effect a larger boycott could have on Vladimir Putin’s war machine.
Canada, which until 2019 imported about 18,000 barrels from Russia each day, announced a ban on Russian crude oil and refined petroleum products this week. But asked about ending Russian oil imports on Wednesday, President Biden was noncommittal, saying only that “nothing is off the table.”
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Biden has been hesitant for obvious reasons. With his political standing already badly eroded by inflation, whose duration he seriously underestimated, he and his team are reluctant to take actions that could spike prices further.
Still, momentum is growing. Some oil brokers and refiners are refusing to buy Russian oil, either to show solidarity with Ukraine or out of fear that sanctions are coming. Now liberal US Senator Ed Markey, Democrat of Massachusetts, centrist Joe Manchin, Democrat of West Virginia, and moderate Republican Lisa Murkowski of Alaska are pushing legislation to end US imports of Russian oil, the latter two in a joint effort.
As Murkowski declared to Politico, the effort is worth it, even if it means higher gas prices.
“Nobody wants to see that,” she said. “And this is going to hurt. But we all need to recognize Europe is in the midst of a war with Russia now. Innocent people are dying, children are dying.”
On Thursday, House Speaker Nancy Pelosi added her voice to the cause, saying, “I’m all for that — ban it.”
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So what would the effect be at the pump for the United States? If it’s just the United States and Canada, experts say it would be small.
“The short answer is, it probably wouldn’t have a big effect on gasoline prices in the US,” said Jim Krane, a fellow for energy studies at Rice University. “Individual refiners might be angry, but I don’t think anybody would really notice other than them.”
That’s because Russian oil is a relatively minor part of our imports and a still smaller part of our consumption. A rough guide: Through the first 11 months of 2021, we imported about 700,000 barrels of oil and other petroleum products a day from Russia, at a cost of more than $17 billion. Our largest supplier, Canada, sells us more than 4.1 million barrels a day.
Over the last several years, Russia has accounted for 4 to 8 percent of US imports of oil and petroleum products, and in 2021 accounted for about 3.5 percent of our daily consumption. By points of comparison, we import a total of some 8.5 million barrels a day and consume about 20.5 million barrels.
If such a ban catches on, however, the effect would grow larger, both on Russia and at the pump.
There are ways to offset the latter effect. Nations can tap their strategic reserves. Saudi Arabia, meanwhile, has not only large reserves but also the ability to add 1 million or so barrels to the daily supply. And governments could offer compensatory payments to their citizens.
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But even if this remains a relatively isolated effort at the beginning, it’s worth doing. Other oil-producing nations have had to slash their prices when facing sanctions.
“One of the things we know from past sanctions on Iran and Venezuela is those countries wound up having to sell their oil farther afield and at vast discounts,” Amy Myers Jaffe, research professor and energy expert at Tufts University’s Fletcher School, noted in an interview.
Further, we’d be setting an example, one that would give us the moral high ground to push our allies to move in the same direction. In the new world that Russia’s Ukrainian rampage has ushered in, the European Union countries, which get some 40 percent of their natural gas imports and 27 percent of their crude oil from Russia, will have to become far less dependent on Russian energy. Liz Truss, Britain’s foreign secretary, has advocated that all the G-7 nations — Canada, the United States, Britain, France, Germany, Italy, and Japan — set limits on their oil and gas imports from Russia. We need to help push that effort — but as Markey noted in recent Senate remarks, it’s hard for the United States to preach temperance from a barstool.
No, it wouldn’t be a silver bullet. But ending Russian oil imports would send a powerful message and could help trigger a powerful cascade. Biden should grab it from the table — and put it into effect.
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Scot Lehigh is a Globe columnist. He can be reached at scot.lehigh@globe.com. Follow him @GlobeScotLehigh.
