As Russia’s invasion of Ukraine continues, the global economy’s continued reliance on Russian oil and gas has prompted a wave of policy responses alongside pushback from U.S. lawmakers seeking to halt imports and boost domestic production.
Brent crude, a key international benchmark, has surged since the invasion began on Feb. 24, rising from under $97 per barrel to more than $107 per barrel as of March 1.
At 524 million tons in 2021, Russia produces more oil than any country other than Saudi Arabia and the United States.
The International Energy Agency reports that top destinations for that oil include OECD Europe and China, which receive roughly 60 percent and 20 percent of Russian oil exports, respectively.
Sean Strawbridge, CEO of the Port of Corpus Christi, Texas, the country’s dominant crude oil export hub, said the United States imported more Russian crude to replace Venezuelan heavier crudes after Washington sanctioned Venezuela’s state-owned oil company PDVSA.
Many refineries along the U.S. Gulf Coast are designed to handle heavier crudes rather than the lighter ones coming out of the Permian Basin in the southwestern United States.
“What we hope to see is more American refineries retool, to be able to refine the lighter, sweeter crude, but those are more expensive feedstocks,” said Strawbridge.
He told The Epoch Times that current U.S. sanctions won’t do much because they allow Russian oil and gas to continue flowing.
On a webpage about the Russia–Ukraine conflict, the IEA said the invasion “has as of yet not resulted in a loss of oil supply to the market.” IEA officials didn’t respond by press time to a request by The Epoch Times for comment about whether that’s still the case.
On March 1, the United States and other IEA member nations agreed to release 60 million barrels of oil. U.S. Energy Secretary Jennifer Granholm said in a statement that the U.S. would release 30 million barrels from its Strategic Petroleum Reserve.
Russia produces 11 million barrels of oil per day, and the United States consumes about 20 million barrels of oil per day.
The world as a whole consumes roughly 97 million barrels of oil per day, meaning the release is equivalent to about 16 hours of global oil consumption.
“It doesn’t move the needle,” Strawbridge said.
The IEA doesn’t include the world’s most populous countries, China and India.
India, long reliant on Russian arms, has neither sanctioned nor unequivocally condemned Moscow for its action in Ukraine. Neither has China, which recently entered into a 30-year gas pipeline deal with the country.
Mexican President Andres Manuel Lopez Obrador has also held off on sanctioning Russia.
“We are not going to take any sort of economic reprisal because we want to have good relations with all the governments in the world.”
The Russian state energy company Lukoil recently moved to purchase a 50 percent stake in a Mexican offshore oil project.
Canada has moved to ban Russian oil imports—yet the country imports very little oil from Russia.
In the United States, some lawmakers have called for strong energy sanctions against Russia as well as measures intended to spur domestic production.
In a statement on Feb. 28, Sen. Joe Manchin (D-W.Va.) called on the Biden administration “to take action immediately, up to and including banning crude oil imports from Russia.”
“If there ever was a time to be energy independent, it is now,” he said.
During that interview, Psaki said sanctions on Russian energy “are certainly on the table.”
“We also want to do that and make sure we’re minimizing the impact on the global marketplace, and do it in a united way,” she told Stephanopoulos.
Strawbridge said: “This administration has come out of the gate with their shoelaces tied together on their energy policy. It’s now time for them to untie their shoelaces.
“We’ve got to see more drilling.”
Friends Read Free