After the pleas came from Ukrainian President Volodymyr Zelenskyy to U.S. and Western officials to end the importation of oil from Russia, President Biden is banning all Russian oil imports. While it doesn’t prevent other countries from taking in their oil, it ensures we have fixed this glaring gap in the US stance against the Russian invasion.
By comparison, Ukraine’s European allies are more dependent on Russia for energy. Russia’s natural gas makes up one-third of European consumption. Then there is heating oil, gasoline, and crude oil as well. To remove this crucial support system would cripple Europe and make their energy costs skyrocket almost immediately.
When President Biden started imposing sanctions about two weeks ago he had a goal in mind by leaving the energy sector alone “to limit the pain the American people are feeling at the gas pump.” Well, suffice to say that goal has failed miserably. Between the actual conflict itself, investors bracing in anticipation of it, and the sanctions that are now coming down, we can all expect to pay a lot more at the pump.
The last week alone saw a 45-cent increase in the average cost of a gallon of gas, with us settling in at $4.06 according to AAA. The record high is $4.10, set back in 2008. With these new sanctions and the ban on imports, that record is sure to be destroyed. Rises like this are unhealthy for the American economy and they are things the American people cannot tolerate.
They also do not want to be supporting Russia in this war. Oil companies like ExxonMobil and BP anticipated this moved and ended their relationships with Russian oil imports. Shell on the other hand made another purchase of Russian oil over the weekend, and as a result, has found itself scrambling to apologize for the move due to the international complaints.
There is a glaring problem here though. To allow the European energy market to continue moving, the Treasury Department and others have kept off of banking systems that do not interface with the US. This means that Russia can still trade with their European clients, as well as Venezuela.
The Venezuelan government has come out in large support of the Russians, vowing to help them however they can. Biden has also verbally stated that he wants to increase the imports from there to make up for the hole left by ending Russian imports. There is nothing to stop them from selling us oil from Russia, and them making a little cash for being the middleman. When you consider how poor Venezuela is due to its hyperinflation, it becomes concerning.
We can increase our oil leases and open back up the drilling zones Biden closed off. While they wouldn’t provide overnight relief, it would be a solid start to getting us back to reasonable levels. In the meantime, we will be stuck paying more at the pump, and countries like Saudi Arabia are laughing as they watch their net worth skyrocket without having to lift a finger. If anything, this conflict is good for their kingdom, and it helps their economy while it absolutely cripples ours.
President Biden has yet to wake up and smell the coffee. You cannot just support a country with thoughts and prayers. You cannot take away 5-10 percent of an import in high demand without seeing massive jumps in the price. You cannot sell the American people on this socialist agenda. We need change and we need our money to go further again. This idea of inflation is a good thing, or that the government programs can fix everything is a crock. Can we get off the progressive stagecoach yet? I want to ride the Trump train again.