New sanctions on Russia’s energy sector could temporarily increase gas prices and change oil export patterns, according to experts who analyzed the global impact of previous sanctions on Russia’s fossil fuels. .
President Joe Biden is considering imposing new sanctions on Russian energy before leaving office, The Washington Post reported, citing four people familiar with the matter. Officials suggested the measures could give President-elect Donald Trump more leverage in potential negotiations with Russian President Vladimir Putin.
If Biden moves forward with sanctions, an analysis of U.S. sanctions against Russia early in the conflict with Ukraine shows that energy sanctions could lead to higher gasoline prices globally.
Natural gas prices, which began rising in 2022 amid tensions with Russia, hit record highs in the United States after the country invaded and sparked a years-long war with neighboring Ukraine.
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President Joe Biden (Brandon Bell)
“Western sanctions against Russia’s energy sector have reduced Russia’s revenues, but they have also created costs for sanctioned countries,” the St. Louis Fed said in a review of the impact of energy sanctions on Russia.
Biden and Western countries imposed sanctions on Russian energy after the country invaded Ukraine, resulting in higher diesel prices around the world. That’s because “there were not enough refineries to meet diesel demand, especially after the United States and other countries stopped buying energy exports from Russia.” According to an analysis of Federal Reserve Economic Data (FRED).
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Diesel producer price index (PPI) in June 2022 was approximately 109% higher than June 2021, according to FRED. But prices have fallen significantly since then, according to Bureau of Labor Statistics data.
The American Enterprise Institute (AEI), a public policy think tank, says sanctions could lead to “substantial changes in oil export patterns, altering trade flows in economically inefficient ways, and forcing sanctioned countries such as Iran and Russia to This could have a variety of effects, including “coercive effects”. And Venezuela sells its oil below market price. ”
Russian President Vladimir Putin (Gabriel Grigorov)
The measure could raise oil prices, but one proponent of the idea suggested that the election being over could give Biden reason to move forward with sanctions.
“The Biden administration has been concerned about rising gas prices and worsening inflation, and that was the main constraint on Russia sanctions policy, its domestic impact,” said Edward Fishman, a senior fellow at Columbia University’s Center on Global Energy Policy. ” he said. Reported. “But the elections are over and inflation is under control. The reasons for being so cautious about sanctions no longer apply.”
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The report comes days after the United States imposed new sanctions on multiple Russian-linked entities and individuals involved in the construction of Nord Stream 2, a massive undersea gas pipeline connecting Russia and Germany. Ta.
FOX News’ Brianne Despiche contributed to this report.
Aubrey Spady is a writer for Fox News Digital.
