President Joe Biden stressed Thursday that new sanctions on Russia in response to its invasion of Ukraine are meant not to disrupt the global oil and natural gas markets.
The new sanctions include restrictions on exports to Russia, as well as sanctions on Russian banks, oligarchs, and state-controlled companies, but do not directly target the energy sector.
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Biden said the sanctions package was specifically designed to “limit the pain” the public has felt at the pump in recent months, saying his administration is “using every tool at its disposal to protect American families and businesses” from high gas costs.
“We’re taking active steps to bring down the cost, and American oil and gas companies should not — should not — exploit this moment to hike their respect prices to raise profits,” Biden continued.
Administration officials are “closely monitoring” energy supplies for disruptions, he added.
“We’ve been coordinating with major oil producing and consuming countries toward our common interest to secure global energy supplies. We are actively working with countries around the world to elevate collective release from the strategic petroleum reserves of major energy-consuming countries,” Biden said. “And the United States will release additional barrels of oil as conditions warrant.”
Biden’s remarks come as markets around the world continued to reel from Russia’s shocking attack, which sent stocks tumbling and caused oil prices to jump to their highest point since 2014.
Inflicting pain on Russia is a risky calculus, both for the United States and for its allies in Europe. Russia is the world’s second-largest supplier of oil and a leading producer of natural gas, and experts have urged caution in recent weeks, warning that imposing harsh sanctions could have a ripple effect, disrupting both the economy and the global energy supply.
That volatility was on display as markets opened Thursday morning. Futures for international benchmark Brent crude surpassed $105 a barrel, the highest point in eight years, while futures for U.S. West Texas Intermediate jumped by more than 8% to trade at $99.46.
All three U.S. markets also opened significantly down, with the Dow Jones Industrial Average falling nearly 700 points, or 2%, after the index ended down 464 points Wednesday evening.
Biden’s remarks Thursday come as oil prices have continued to rise in the U.S., with the average price of gasoline $3.54 per gallon, according to AAA.
The national consumer price index for gas has also increased by 40% since January 2021, according to the Bureau of Labor Statistics, despite the administration’s decision to release a record 50 million barrels of oil from the U.S. strategic reserves in November. The administration has not ruled out the possibility of doing so again in the event supplies remain squeezed.
On Thursday, Biden acknowledged the months-long rise in gas prices even as he pledged to do more to shield consumers against more hikes in the future.
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“I know this is hard, and when Americans are already hurting,” he said. “I will do everything in my power to limit the pain the American people are feeling at the gas pump. This is critical to me.”
