What would a US ban on Russian oil mean for the world?

(EurActiv, 8 Mar 2022) The possibility that the United States might ban Russian oil imports has triggered a surge in Brent crude to almost $140 a barrel, its highest level since 2008.

President Joe Biden held a video conference call with the leaders of France, Germany and the United Kingdom on Monday (7 March) as his administration continues to seek their support for a ban on Russian oil imports.

Russia is the world’s top exporter of crude and oil products combined, at around 7 million barrels per day (bpd) or 7% of global supply. Such a ban would be unprecedented, turbocharging already sky-high prices and risking inflationary shock.

Here are some of the likely consequences of a ban:

Record prices

Western governments have not directly sanctioned Russia’s energy sector but some customers are already shunning its oil to avoid becoming entangled in legal troubles later.

JP Morgan predicts oil could hit a record $185 a barrel by the end of 2022 if disruption to Russian exports lasts that long, although along with most analysts polled by Reuters the bank expects a yearly average price below $100.

The last time oil prices were above $100 was in 2014 and levels reached on Monday were not far shy of a peak of more than $147 hit in July 2008. That is a steep climb from two years ago, when a coronavirus-driven demand slump saw a barrel of West Texas crude at below $0 as sellers had to pay to get rid of it.

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EurActiv, 8 Mar 2022: What would a US ban on Russian oil mean for the world?

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