US ban on Russian oil:
US President Joe Biden on March 8, 2022, declared a total ban on all imports of Russian oil, natural gas and coal to the United States, in an action to impose more stringent sanctions during Putin’s war in Ukraine.
Biden said in his speech that the United States is scrutinising Russia’s biggest economic powerhouse. “We are blocking all purchases of oil and gas and Russia’s energy. That means Russian oil will no longer be accepted in American ports and the American people will face another powerful blow to Putin’s military machine, ”he said.
The United States has denied the purchase of oil and energy from Russia in an integrated way. European countries are still pursuing the incident, and some of them, including Denmark, have engaged to be independent of Russia’s natural gas.
There have reportedly been clashes between European nations over whether to seize control of Russia. It is essential to note that European countries are more dependent on Russian power than the US.
US Oil Imports from Russia
United States oil imports from Russia make up a small portion of the U.S. energy sector, standing at about 8 per cent by 2021 when crude oil was imported at only 3 per cent.
According to the US Department of Energy, Russia’s oil prices declined to zero in the US two weeks ago in February as American companies themselves began severing relations with Russia during its invasion of Ukraine.
How will this affect the Indian economy?
India depends heavily on oil and energy sales to meet its household and domestic demands. About 86 per cent of the country’s crude oil needs are met by imports. The global rise in oil and energy prices should undoubtedly disrupt the Indian market and increase its import bills.
Rising crude oil prices around the world may add to the stress on inflation and inflation and thus have a substantial impact on domestic economic growth. Initial CPI inflation rose to 6.01 per cent in January 2022 from 5.66 per cent in December 2021. A fall in retail inflation exceeds the maximum RBI tolerance band for the first time in 7 months. The situation is expected to worsen with the US blockade on Russia’s power trade.