As US President Joe Biden announced a ban on all Russian oil imports, here's how the move could affect the rest of the world.
Biden's decision comes as Russia continues to wage war in Ukraine, forcing Western leaders to take further steps to try and convince Russian leader Vladimir Putin to bring the fighting to an end.
Today, March 8, Biden made clear the US 'will not be part of subsidising Putin’s war' as he announced the ban, which he described as a 'powerful blow' against Russia's ability to fund the war.
The decision came after Ukrainian President Volodymyr Zelenskyy urged Western leaders to cut off the imports of Russian oil, which made up about 3% of all crude shipments to the US last year, according to the US Energy Information Administration, per The Guardian.
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Though the move will prove damaging for Russia, Biden admitted it does not come without issues closer to home too as he warned Americans will see rising prices as a result, saying: 'Defending freedom is going to cost.'
Rising prices could affect many in the West, with JP Morgan predicting oil could hit a record $185 a barrel by the end of 2022 if disruption to Russian exports continues until then, Reuters reports, although the bank expects a yearly average price below $100.
On both sides of the Atlantic increasing energy costs are expected to cause a rise in inflation, potentially pushing it above 7% in the coming months.
The ban on oil could also cause further delays to the global recovery from the coronavirus pandemic, with preliminary calculations by the European Central Bank (ECB) indicating the breakout of war could cut euro zone growth by 0.3 to 0.4 percentage points this year - and up to one percentage point in a worst case scenario.
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In enforcing the ban, Biden has said the US was acting in close consultation with European allies who are more dependent on the energy supplies from Russia.
The President acknowledged that, as a result of this dependence, allies may not be able to join in with a ban immediately.
The European Union announced today that it is set to phase out its reliance on Russia for energy well before 2030.
Europe currently relies on imports for 90% of its gas and 97% of its oil products, with 40% of gas and a quarter of oil being supplied by Russia.
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If you would like to donate to the Red Cross Emergency Appeal, which will help provide food, medicines and basic medical supplies, shelter and water to those in Ukraine, click here for more information
Topics: US News, UK News, World News, Russia, Joe Biden
