The United States and Britain impose crude oil embargo on Russia to increase the risk of economic recession
U.S. President Biden announced an energy ban against Russia on the 8th, which further aggravated the market panic about the tight supply of oil and its products, and the international oil price continued to rise. According to the analysis, if the price of oil and other commodities continue to soar, the inflationary pressure in the US and Europe will increase, and the economy will face the risk of recession.
The US government announced on the 8th that it would stop importing oil, natural gas and coal from Russia. Biden said that the energ embargo against Russia wil l cause the domestic gasoline price in the United States to continue to rise and increase people's living costs. He warned American oil and gas companies not to take the opportunity to drive up prices.
Later on the 8th, US House Speaker Pelosi announced on social media that the House of Representatives will vote on a sanctions bill against Russia on the same day. Specific sanctions include prohibiting the import of oil and other energy products from Russia, evaluating Russia's accession to the World Trade Organization, and exploring how to reduce Russia's participation in the global economy.
Different from the previous coordinated sanctions imposed on Russia by the United States and Europe, the energy embargo against Russia announced on the 8th is a unilateral action of the United States. White House press secretary Psaki told reporters on the same day that the United States "does not expect" or "does not require" European countries to follow the example of the United States in imposing an energy embargo on Russia, and "every country will make its own decisions". Earlier on the 8th, the European Union announced that natural gas imports from Russia would be reduced by two thirds this year. The British government said on the 8th that Britain will phase out imported oil and oil products from Russia by the end of this year. Oil imported from Russia accounts for 8% of Britain's total oil demand, and Britain will work closely with international partners to ensure alternative fuel supply. The French Presidential Palace said on the 8th that France will not immediately stop importing Russian natural gas, hoping to gradually get rid of its dependence on Russian oil and natural gas in the long run.
Since the conflict between Russia and Ukraine began on February 24th, the international oil price has risen by more than 34%. On March 7th, London Brent crude oil futures price once broke through $135 per barrel, hitting the $140 mark, reaching the highest level since July 2008,
and reached $130.21 per barrel in intraday trading on March 9th, an increase of 1.07% compared with the closing of the previous day. Analysts pointed out that the United States' ban on the import of Russian fossil fuels, including oil, means that the western economic sanctions against Russia have escalated, which is expected to further trigger the global crude oil market tension.
The Wall Street Journal reported that market investors' concerns about tight global oil supply will continue to push up international oil prices and US gasoline prices, which will further aggravate the inflationary pressure in the United States. According to the economic department of Bloomberg, if the international oil price remains above $120 per barrel, the US inflation rate may rise to 9% by April this year.
At the same time, the impact on Europe as a whole may be greater than that of the United States when sanctions are imposed on Russian energy, and the growth prospects of relevant economies will deteriorate. Carolyn Bain, chief commodity economist of Kay Macro, said that if all major consumer countries completely banned the import of Russian energy, by the end of this year, the inflation of developed economies would be around 5%, compared with the forecast of 2.4% before the Russian-Ukrainian conflict. The decline of household spending power and power cuts will cause the European economy to fall into recession.