Oil Import Bans
In remarks at the White House, President Joe Biden announced that the U.S. will be banning imports of Russian energy products. The White House released text of the Executive Order and a Fact Sheet. The ban encompasses Russian crude oil, petroleum, petroleum fuels, oils and distillates, LNG, coal, and coal products, as well as approval, financing, facilitation, or guarantees for these products. It also prohibits new investment by Americans in the Russian energy sector.
Speaker Pelosi, who has hewed closely to White House sanctions plans up to this point, told her caucus this morning that the House will be moving forward with legislation to ban Russian oil imports anyway. Fox News White House Correspondent Jacqui Heinrich has some additional background on this break. As noted yesterday, the House Ways and Means and Senate Finance Committees reached an agreement on an oil import ban and WTO/tariff actions. However, the White House attempted to scuttle the deal so as not to appear to be boxed in. They went to House Speaker Nancy Pelosi (D-CA), Senate Majority Leader Chuck Schumer (D-NY), and Senate Finance Committee Chairman Ron Wyden (D-OR).
A key question in the oil import ban is how the U.S. backfills the Russian imports, but this question carries its own political concerns – Senate Foreign Relations Committee Chairman Bob Menendez (D-NJ) voiced concern about using Venezuela and Sen. Marco Rubio (R-FL) about Iran and Venezuela.
The UK announced it would phase down Russian oil imports by the end of the year. Unlike the U.S., this will not include natural gas, though it is exploring options.
In his remarks, President Biden noted continued close cooperation with Europe but that they cannot join at the moment. However, the White House will be evaluating options for assistance – one of which could be leveraging the Defense Production Act or a lend-lease-style procurement program to produce energy-efficient heat pumps to Europe.
Shell and BP will not make any new purchases of Russian oil and gas amid public pressure. Shell had been the subject of intense criticism and initially defended its buys a few days ago. In its announcement, Shell warned this move would likely result in producing less fuel, while BP made clear it would resume purchases if the security of its energy supply is threatened. Australian refiner Viva Energy also announced it is not buying Russian crude. Its only other refiner, Ampol, said it has not bought Russian energy products since the invasion.
One potential winner in this spate of announcements is China, which is considering buying bargain-basement stakes in companies like Gazprom and Rusal. Then again, a senior member of Russia’s ruling party has proposed nationalizing facilities of companies that shut down operations.
Diplomacy
Ukrainian President Volodymyr Zelenskyy said that Ukraine will no longer press for NATO membership since “NATO is not prepared to accept Ukraine.” He also said he is open to “compromise” on the status of the breakaway regions of Donetsk and Luhansk. President Zelenskyy will also address the UK’s parliament today.
Chinese President Xi Jinping talked with French President Emmanuel Macron and German Chancellor Olaf Scholz. President Xi urged “maximum restraint” in Ukraine, said the three countries should jointly support peace talks, and expressed concern about the impact of sanctions on global finance, energy, transportation, and supply chains. Brazil said it would refrain from taking sides not out of “indifference” but “impartiality.”
Other Sanctions and Consequences
The Commerce Department announced that South Korea will comply with U.S. export controls to Russia.
The EU announced sanctions on 14 additional Russian elites and their families, 100 members of the upper house of Russia’s parliament, and at least one entity. However, it stopped short of closing its ports to Russian ships due to German objections. The EU is also weighing adding three Belarusian banks to SWIFT sanctions. Australia announced it would impose additional sanctions on Russian military commanders and state-owned media figures.
Sens. Angus King (I-ME), John Cornyn (R-TX), Bill Hagerty (R-TN), and Maggie Hassan (D-NH) introduced the Stop Russian GOLD Act, which would restrict the ability of Russia’s central bank to sell its gold reserves.
In his remarks announcing the Russian oil import ban, President Biden praised companies who pulled out of Russia “without even being asked” and said they are “leading by example.” McDonald’s is temporarily closing its 850 stores in Russia. The New York Times is pulling its reporters from Russia amid the new fake news law.
Ukraine Sitrep
A senior Pentagon official says that Russian troops are still trying to encircle Kyiv, but are bogged down. The official also believes that, while Russia still doesn’t have air superiority, surface-to-air missiles are giving it more capability. Russia continues to make more progress in southern Ukraine, having isolated Mariupol, where the humanitarian situation is dire. The House Intelligence Committee held a hearing with the Director of National Intelligence (DNI), Avril Haines, and Director of the CIA, Bill Burns. DNI Haines gave an assessment that Russian President Putin has not been deterred by military setbacks and may even escalate, that the threat is increasing. U.S. intel agencies also modified their rules in response to concern from Democratic and Republican lawmakers in order to share more intel with Ukraine.
Ukraine alleged that Russian forces are firing on a humanitarian corridor again. The U.S. is treading cautiously on the question of Russian war crimes. Ukraine claims that 40,000 foreign fighters have joined their International Legion.