US President Joe Biden has announced a ban on Russian oil and other energy imports in retaliation for the invasion of Ukraine, underscoring strong bipartisan support for a move that he acknowledged would drive up US energy prices.
"We're banning all imports of Russian oil and gas energy," Mr Biden told reporters at the White House.
"That means Russian oil will no longer be acceptable in US ports and the American people will deal another powerful blow to (Russian President Vladimir) Putin's war machine."
Oil prices jumped on the news, with Benchmark Brent crude LCOc1 for May climbing by 5.4% to $129.91 a barrel.
Mr Biden has been working with allies in Europe, who are far more dependent on Russian oil, to isolate Russia's energy-heavy economy and Putin.
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Mr Biden said sanctions imposed by the United States and its allies had already caused the Russian economy to "crater".
He said the latest moves had been made in close consultation with allies and partners around the world.
US President Joe Biden has announced a US ban on Russian oil and other energy imports, ramping up a pressure campaign on Moscow in retaliation for the invasion of Ukraine | https://t.co/TG5XX31OTp pic.twitter.com/hduFAJFjN1
— RTÉ News (@rtenews) March 8, 2022
The import ban by Europe and the United States on Russian oil could send global oil prices spiralling up to $200 a barrel, analysts at Oslo-based consultancy Rystad Energy said.
Many buyers are already avoiding Russian oil so as not to become entangled in existing sanctions.
Goldman Sachs raised its Brent forecast for 2022 to $135 from $98 and its 2023 outlook to $115 a barrel from $105, saying that the world economy could face the "largest energy supply shocks ever" because of Russia's key role.
Dimming expectations for an imminent return of Iranian crude to global markets have added to upward pressure on prices amid a slowdown in talks between Tehran and world powers over its nuclear activity.
Oil supply disruptions come as inventories continue to fall worldwide.
Five analysts polled by Reuters estimated on average that US crude stockpiles decreased by about 800,000 barrels in the week to 4 March.
The poll was conducted before weekly inventory reports from the American Petroleum Institute on Tuesday and the US Energy Information Administration on Wednesday.
Media reports about the International Energy Agency's readiness to release more oil from emergency stockpiles had no impact on the rally.
"Ultimately, the IEA is not announcing significant action," said Craig Erlam, senior market analyst at OANDA. "In this market, words are not going to have an impact."
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Earlier today, Danni Hewson, a financial analyst with AJ Bell, said the US ban on Russian oil was a realistic prospect.
"President Biden has said that absolutely nothing is off the table when it comes to Russia but the reality is that a lot of firms are already self-sanctioning so in terms of how effective those sanctions would be, we are already seeing a huge amount of the effect passing through the market as a lot of customers try to find alternate supplies which is pushing up supplies from elsewhere in the world," Dannie Hewson said.
She said it would take time to find alternative energy sources to Russian supplies.
"We know that there are discussions ongoing at the moment with OPEC countries. We know that there are discussions under way with Iran, Venezuela, Saudi Arabia to try to up the amount of oil and gas that is flowing into Europe.
"When it comes to gas particularly, we know that Europe is massively dependent on Russian supplies so the threat to cut off that Russian supply to Germany will just push those prices higher," Ms Hewson said.
"What this is doing is stoking the debate about our energy security. What should we be looking at? How can we be investing? Can it just be in green technology or do we have to have some kind of bridge?", she asked.
"Should we be looking at alternate gas and oil supplies and maybe do some more drilling?," she added.
