U.S. to ban oil imports from Russia as White House explores drastic plans to buffer economy from energy shock

War in Ukraine: Live Updates

Europe, which is far more dependent on Russian energy exports, is currently considering its own similar ban. Collectively, the measures from both the U.S. and Europe would deprive Russian President Vladimir Putin of one of his government’s chief sources of revenue — but also risk a shock to the global economic system that could severely damage numerous domestic economies.

The ban, initially resisted by the White House, has gained momentum each day as more images pour in from the front of the war. The United States has already deployed a number of economic measures to hurt Russia, including imposing sanctions on its central bank and oligarchs close to Putin. The administration up to now had sought to protect global energy markets from the impact of banning Russian oil and gas, while keeping a wary eye on soaring gas prices in the United States. The national average gas price on Tuesday was $4.17 per gallon, according to AAA, up from $3.62 a month ago and $2.77 a year ago.

But the ongoing atrocities committed by Russia in Ukraine, as well as bipartisan pressure from Congress, quickly changed the administration’s calculus.

As the ban gained momentum in Washington, senior White House officials have over the last few days explored a range of measures to fill the gap left by a potential prohibition on Russian energy from the United States and other countries. These measures have included the massive scaling up of production of “heat pumps” for Europe, an additional release of U.S. oil reserves, and a gas tax holiday to protect American consumers, according to people familiar with the matter.

The White House is also considering a renewed push for its clean energy agenda as part of an attempt to move America away from its dependence on authoritarian petrostates, people familiar with the matter said.

Congress aims to act as soon as this week on new Ukraine aid, punishments against Russia

Energy experts say many of these efforts could take months if not years to materialize, and the short-term domestic consequences of the Russia oil ban could be severe. With oil prices already rising, the Dow Jones industrial average closed down around 800 points on Monday, a drop of about 2.4 percent. Commuters could see gas prices north of $5 per gallon if Europe and America join in banning Russian energy exports, according to the preliminary estimates of Bob McNally, consultant and president of Rapidan Energy Group, an energy market research firm, and a former official in the George W. Bush administration.

Higher gas prices impact many sectors of the economy. Airlines raise their prices, passing along the higher costs to consumers. Drivers often change their behavior, cutting back on travel. And prices on products that are delivered by trucks also can increase, creating a new wave of inflationary pressures. Currently, Russia produces about 11 percent of the world’s oil, or roughly 10.5 million barrels a day.

“There will be a global recession,” McNally said. “It’s pretty much lights out for the global economy if we ban Russian oil exports … The only thing would be demand destruction, which would be bone-crushing price increases. I don’t see any way out.”

After resisting for weeks, though, the Biden administration shifted in recent days towards preparations for the ban as the international outcry built over Russia’s brutal push into Ukraine. President Biden is scheduled to speak Tuesday morning to announce “actions to continue to hold Russia accountable for its unprovoked and unjustified war on Ukraine,” the White House said in a statement.

The news that the White House was moving as soon as Tuesday to enact the Russia oil ban was first reported by Bloomberg.

“History is going to remember much better what we did or did not do to stand up for freedom than it is going to remember the inflation rate, or the price of gasoline, in the spring and summer of 2022,” said Larry Summers, a former Democratic treasury secretary who remains in close contact with senior White House officials.

White House reaches out to longtime foe Venezuela amid Russia crisis, rising gas prices.

As they moved closer to announcing the ban, senior Biden administration officials spent the last several days exploring drastic measures to protect the global economy from the potential fallout of even higher oil prices.

White House aides, for instance, have studied plans to dramatically scale up U.S. production of energy-efficient heat pumps that they hoped could be used in Europe if Europe decided to cut its imports of Russian oil, three people with knowledge of the matter said. Biden officials have weighed whether heat pumps could be produced through the Defense Production Act, an emergency national defense law, or through procurement programs at the Department of Defense, the people said. Some advocates close to the effort have compared the idea to the “Lend-Lease Act” program through which the U.S. sent critical supplies to the Allied nations that had been invaded by Germany in World War II.

Biden aides have also explored yet another release of the Strategic Petroleum Reserve — which would represent the third recent move to tap the nation’s oil reserves, although such a measure would likely be months away — and revived discussions about a gas tax holiday to help alleviate Americans’ price pressures at the pump, two other people with knowledge of the deliberations said.

Additionally, Biden has personally expressed support for recasting the administration’s clean energy proposals as part of an attempt to move America away from its dependence on authoritarian petrostates, according to two people aware of the president’s thinking on the matter. John F. Kerry, the former secretary of state who is now Biden’s special presidential envoy for climate, has advocated internally for the administration to aggressively embrace the argument that its clean energy agenda represents a policy response to the Ukraine crisis. Kerry is also playing a leading role with other top officials behind-the-scenes in coordinating the effort for Europe to cut off Russian energy, an invaluable source of financial support for Russian President Vladimir Putin.

Biden administration officials have simultaneously launched an effort to explore what the administration can do to get other authoritarian countries to ramp up their production of oil — including by relaxing sanctions on Venezuela — to buffer the global economy from the blow.

Biden’s move to shut down Russian oil imports came after a week of mounting pressure from Capitol Hill, where calls for a ban were embraced by leaders of both parties, including Speaker Nancy Pelosi (D-Calif.).

The House was preparing to pass a bill banning Russian oil imports as soon as Tuesday, and even after the White House’s action, other measures aimed at Russia and Belarus could follow. The top Democrats and Republicans on the House and Senate committees overseeing foreign trade issued a joint statement Monday announcing an agreement on legislation that would strip Russia and Belarus of their current trade preferences and order U.S. diplomats to seek Russia’s expulsion from the World Trade Organization.

Mike DeBonis contributed reporting to this article.