- The United State's President, Joe Biden on Wednesday, March 9, 2022 called the bluff of Vladimir Putin, the Russian President and imposed a ban on Russian oil
- The United Kingdom, a major ally of the US also said it will begin the gradual process of phasing out the use of Russian oil the year end
- The announcement by Biden has sent shockwaves across the global energy markets with the price of crude selling at $130 per barrel
The US President, Joe Biden has announced a ban on Russian oil products, effective end of March as a punitive measure against Putin for invading Ukraine, calling the bluff of Putin’s government which threatened an increase in the price of oil if the ban is announced.
Nairametrics report says that the United Kingdom has also announced that it will phase out the use of Russian oil by the end of 2022.
Skyrocketing price of crude
The move by the US, the world’s highest producer of crude oil, has sent shockwaves across the energy market and sent the price of crude oil soaring on the international market.
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The crude benchmarks have soared more than 30 per cent since Putin’s troops invaded Ukraine and have led foreign countries to impose severe sanctions on Moscow.
The US and its allies have danced around the ban on Russian oil and gas so as to mitigate any rise in the price of crude oil. Countries have avoided buying petroleum products from Russia in order not to incur the wrath of the United States and its allies.
According to reports, the shift of the ban by the US is to allow countries to find alternative sources of oil as Russia is the third-largest oil producer in the world behind Saudi Arabia.
What you should know
The price of the global benchmark for Brent crude rose by 0.81 per cent, sending the cost to $130 per barrel, while the bench for the US, the West Texas Intermediate crude, went up by 1.38 per cent.
Russia produces between 7 to 8 million barrels per day and supplies the global about 7 per cent of crude.
U.S. Energy Secretary Jennifer Granholm stressed that partners were not under pressure to place an embargo on Russian oil. She told CNBC that the US does not rely that much on Russian oil.
The oil price has been predicted by Goldman Sachs to rise to $135 from $98 and predicts that a barrel will sell for between $115 a barrel to $105.
Russia threatens US, others of dire consequences if ban of its oil and gas takes effect
Legit.ng has reported that Russia is puffing warning to Washington and its European allies that if they should go ahead and implement a ban on its oil and gas, the ripple effects will reverberate across the global oil markets
The country has threatened to shut down a major gas pipeline to Germany and said that oil prices will hit $300 per barrel if the West makes good their threats, according to a report by CNBC.
Russia’s Deputy Prime Minister, Alexander Novak said on Monday, February 7, 2022, that it is obvious that a rejection of Russian oil will lead to disastrous outcomes for the global market.