US sanctions currently specify that once Russian crude oil is transported to a third country and refined into another product (diesel, gasoline, jet fuel), that product is no longer considered of Russian origin – and it can be sold at world prices, subject to no price cap. This has to change.
WASHINGTON, DC/KYIV – The United States has done a great deal to help Ukraine fend off Russia’s full-scale invasion and terrorist tactics since February 2022, including through generous financial and military assistance. In addition, immediately after the invasion, the Biden Administration (and Congress) banned the import of Russian crude oil. But imports of refined products derived from Russian oil were allowed to continue under some conditions. To reduce further the revenue that enables the Kremlin to continue its aggression, now all such imports, without exception, should be prohibited.
During 2022, the US persuaded its G7 partners and the European Union to impose a price cap on exports of Russian oil and refined products. Currently, these exports can be carried, insured, and financed by Western companies only if the price paid is at or below a particular level ($60 per barrel in the case of crude oil). This cap has proved effective at reducing Russian revenue, increasing fiscal pressure on the Kremlin while preventing disruptions to the world oil market.
But recent efforts to lower the cap further have run into resistance. Given the US-EU political impasse on lowering the price cap, banning the import of all Russian-origin gasoline and other refined products into the US is a low cost and logical way to step up the economic pressure on Putin’s regime, while also encouraging US allies to do the same.
WASHINGTON, DC/KYIV – The United States has done a great deal to help Ukraine fend off Russia’s full-scale invasion and terrorist tactics since February 2022, including through generous financial and military assistance. In addition, immediately after the invasion, the Biden Administration (and Congress) banned the import of Russian crude oil. But imports of refined products derived from Russian oil were allowed to continue under some conditions. To reduce further the revenue that enables the Kremlin to continue its aggression, now all such imports, without exception, should be prohibited.
During 2022, the US persuaded its G7 partners and the European Union to impose a price cap on exports of Russian oil and refined products. Currently, these exports can be carried, insured, and financed by Western companies only if the price paid is at or below a particular level ($60 per barrel in the case of crude oil). This cap has proved effective at reducing Russian revenue, increasing fiscal pressure on the Kremlin while preventing disruptions to the world oil market.
But recent efforts to lower the cap further have run into resistance. Given the US-EU political impasse on lowering the price cap, banning the import of all Russian-origin gasoline and other refined products into the US is a low cost and logical way to step up the economic pressure on Putin’s regime, while also encouraging US allies to do the same.