WASHINGTON–The Biden administration will take steps to ensure that its sanctions against Russia over Ukraine don’t lead to a jump in energy prices–and will act to lower prices if they do, a senior State Department official said Tuesday.
The U.S. sanctions stop short of measures that could curtail oil and gas exports out of Russia, the official said, as the U.S. seeks to dent the Russian economy while avoiding collateral damage to the U.S.
“The sanctions that are being imposed today and that could be imposed in the near future are not targeting and will not target oil flows and natural gas flows,” the official told reporters.
“Doing anything that affects … or halts energy transactions would have a great impact on the United States, American citizens and our allies. So our intention here is to impose the hardest sanctions we can while trying to safeguard the American public and the rest of the world from those measures,” the official said.
Oil prices have been rising as demand rebounds from pandemic lows, and the threat of disruptions in international energy markets are exacerbating that trend. Benchmark Brent crude rose 1.5% to settle at $96.84 a barrel Tuesday.
U.S. officials are also working closely with other countries to ensure more supply gets on the market if prices do rise, the official added.
That could include releasing government-owned oil from the Strategic Petroleum Reserve, as the Biden administration did last year. But that won’t happen as long as prices stay stable, the official said.
U.S. officials have been talking with countries from around the world, including in the Middle East and Asia, which have been reluctant to join the U.S. in other recent reserve releases.
Saudi Arabia and other OPEC countries have told U.S. officials in recent meetings that they understand the need to keep markets stable considering the ongoing international crisis, and the severity of the situation in Ukraine is likely to make major consuming countries in Asia, like China, more likely to follow through on working with the U.S. on reserve releases than they have been on releases the U.S. have pushed for in recent months, the official said.