Bipartisan Congressional Leaders Back Russian Oil Ban, Suspending Trade Relations

Topline

Four top congressional leaders—the Republican and Democratic leaders of the powerful finance committees—announced Monday they have agreed on legislation to ban Russian oil and other energy products and suspend normal trade relations with Russia and Belarus, another step to further cripple Russia’s economy as punishment for the invasion of Ukraine.

CULVER CITY, CA – APRIL 25: Oil rigs extract petroleum as the price of crude oil rises to nearly … [+] $120 per barrel, prompting oil companies to reopen numerous wells across the nation that were considered tapped out and unprofitable decades ago when oil sold for one-fifth the price or less, on April 25, 2008 in the Los Angeles area community of Culver City, California. Many of the old unprofitable wells, known as “stripper wells”, are located in urban areas where home owners are often outraged by the noise, smell, and possible environmental hazards associated with living so close to renewed oil drilling. Since homeowners usually do not own the mineral rights under their land, oil firms can drill at an angle to go under homes regardless of the desires of residents. Using expensive new technology and drilling techniques, California producers have reversed a long decline of about 5 percent annually with an increased crude flow of about 2 1/2 million barrels in 2007 for the first time in years. (Photo by David McNew/Getty Images)

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Key Facts

Rep. Richard Neal (D-Mass.) and Rep. Kevin Brady (R-Texas), the chairman and Republican leader on the House Ways and Means Committee, and Sen. Ron Wyden (D-Ore.) and Sen. Mike Crapo (R-Idaho), the chairman and Republican leader of the Senate Finance Committee, said they had reached agreement on legislation to send a “clear message” to Russian President Vladimir Putin that “his war is unacceptable and the United States stands firmly with our NATO allies.”

The legislation would also allow President Joe Biden to further increase tariffs on Russian and Belarusian products, and give him the authority to reinstate trade relations with the two countries “subject to certain conditions and congressional disapproval.”

The legislation would also require the U.S. Trade Representative to seek Russia’s suspension from the World Trade Organization and stop Belarus from joining the WTO.

When asked Monday whether Biden would sign a ban on the import of Russian oil, White House Press Secretary Jen Psaki said, “No decision has been made at this point.”

Psaki added the administration is discussing a potential ban both internally and with NATO allies as recently as Monday morning, when Biden spoke with European leaders about the Russia-Ukraine conflict.

Big Number

Big number: 3.5%. That’s how much of U.S. imported oil came from Russia in 2021—the greatest percentage in two decades, but a relatively low rate compared to the 57% imported from Canada. However, it imported 21% of its gasoline from Russia last year, more than any other country.

Surprising Fact

The national average of U.S. gas prices has risen 49.1 cents per gallon in the last week since Russia invaded Ukraine, according to data from GasBuddy—the largest seven-day rise in history. Prices currently sit at $4.11 a gallon on average nationally.

Key Background

On Saturday, senior U.S. officials secretly traveled to Venezuela to discuss potentially lifting sanctions on Venezuelan oil exports and soften the financial blow of a possible Russian energy ban, the Washington Post and NBC News reported, based on unnamed sources. Venezuela is known as one of Russia’s most important allies, and once supplied the U.S. with much of its oil before sanctions were put in place. Venezuela has more proven oil reserves than any other country in the world, and sold around $2.5 billion in oil to Russia last year, according to NBC News. The results of the talks remain unclear.

Tangent

Speaker Nancy Pelosi (D-Calif.) said in a letter to Democratic colleagues Sunday night the House had been exploring such legislation. Pelosi also said Congress plans on sending $10 billion in humanitarian, military and economic support to Ukraine, and reiterated Biden’s past statements that American troops would not enter the country, but that the U.S. would provide military equipment.

Source: https://www.forbes.com/sites/masonbissada/2022/03/07/bipartisan-congressional-leaders-back-russian-oil-ban-suspending-trade-relations/