GT Voice: US banning energy imports from Russia set to misfire
Published: Mar 09, 2022 09:27 PM
oil Photo: CFP

oil Photo: CFP

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US President Joe Biden announced on Tuesday a ban on imports of Russian oil, natural gas and coal in response to the conflict between Russia and Ukraine.

While Biden said that "this is a step that we're taking to inflict further pain on" Russia, the move seems more likely to drive up energy prices, which will not only harm the US economic recovery from COVID-19, but also deal a major blow to the global economy.

Sanctions on Russia's energy industry had been considered to be an unlikely punishment that the West would impose on Russia, because it would force up global energy prices, something the inflation-stricken US and EU desperately need to avoid. 

At a time when the US is struggling with soaring inflation and high gasoline prices, it is anything but sensible for the Biden administration to voluntarily cut off an important source of its oil supply. The US imported more than 20.4 million barrels of crude and refined products a month on average from Russia in 2021, about 8 percent of US liquid fuel imports, according to the Energy Information Administration.

A direct consequence of the energy sanctions will probably see energy prices and the prices of all energy-related products surge to unprecedented highs, the unknown impact on the US economy may make one wonder whether Biden's administrative ban is aimed at punishing American people instead of Russia.

What's worse, the US-led Western sanctions against Russia's energy sector may push the global economy into perilous uncharted waters. Compared to the US' limited dependence on Russia's energy supplies, Europe may be the region that is to bear the brunt of the self-inflicted energy insecurity. Shortly after Biden's announcement, the UK announced it would phase out Russian gas imports by the end of 2022, while the EU plans to gradually reduce imports of Russian oil and natural gas, according to media reports.

The West has been stepping up sanctions against Russia, putting the world economy towards the dangerous division between Western and non-Western economies.

There is a growing perception that the US' abuse of unilateral sanctions won't help ease up the Russia-Ukraine tensions. Instead, the geopolitical crisis faces the risk of further escalation into a global economic crisis under the US-led sanctioning moves.

Global markets had been expecting a recovery earlier this year, but turned downwards because of the conflict and the Western sanctions. Investors are now largely shaken, because they do not know when the economic warfare between the US and Russia will come to an end. 

The huge geopolitical risks also put on pressure on China's goal to stabilize economic growth. This is why China continues to hope that Russia and Ukraine could resolve their differences through talks at the earliest. 

Gina Raimondo, the US secretary of commerce, said on Tuesday that the US could take actions against Chinese companies that defy US sanctions on Russia. 

China will not follow the US when it comes to sanctions and firmly opposes any form of unilateral sanctions that lack support of international laws.

China will, as always, carry out normal economic and trade cooperation with Russia and all parties. And China's cooperation with Russia in the oil sector will not be disrupted by US sanctions. If the US sanctions against Russia hurt China's interests, China will take the necessary measures to fight back.