How a Ban Russian Oil Imports Could Affect the U.S. Economy – The New York Times

by | Mar 8, 2022 | Financial

President Biden announced a ban on Russian oil imports on Tuesday, a move that economists said could have small but potentially meaningful domestic economic consequences, pushing prices at the gas pump higher at a time when inflation is already running fast.“We’re banning all imports of Russian oil and gas and energy,” Mr. Biden said, speaking on Tuesday at a White House briefing. He said the plan would target the “main artery” of the Russian economy.Russia produces about 12 percent of the world’s oil and 17 percent of its natural gas, according to estimates from J.P. Morgan. Europe imports far more of its supply from Russia than the United States, but energy markets are global, and the mere threat of a ban has pushed commodity prices higher in recent days.“Prices in some markets like oil already appear to be building in a high probability that further sanctions will be imposed,” Alec Phillips, an economist at Goldman Sachs, wrote in a research note. That was likely to mitigate some of the added fallout from any further action, he wrote.Economists have consistently noted that although an oil and gas ban is almost sure to push inflation higher in the United States, the scale of the economic consequences would depend in large part on how it is structured. For instance, it would likely make a big difference globally and in financial markets whether the United States pursued the ban unilaterally or in concert with European partners.A ban across many countries “would severely reduce and disrupt energy supply on a global scale and alread …

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