(Yahoo!Finance) - On Tuesday, President Joe Biden moved to hit Vladimir Putin’s economy where it hurts the most and said the U.S. will ban Russian oil, natural gas, and coal in response to the invasion of Ukraine.
But people around the globe could feel the pain if the move — which the United Kingdom followed — spikes global oil prices even higher than the astronomical prices Americans already see at the pump.
In a Yahoo Finance interview Tuesday, Commerce Secretary Gina Raimondo acknowledged that the world outside of Russia will feel the effects of the move to punish Putin. “President Putin's invasion of Ukraine isn't going to be painless for anyone,” she said.
But she added that the administration’s sanctions aim to “maximize pain for Putin in the short-term to bring this war to an end as quickly as possible.” The goal here, says Raimondo, is to cripple the Russian economy to end this “in the days and weeks to come.”
Last year, the U.S. imported nearly 700,000 barrels per day of crude oil and refined petroleum from Russia. In announcing the plan, the White House noted that “not all of our allies and partners are currently in a position to join us” in a boycott. The executive order also prohibited Americans from financing or helping foreign companies doing business with Russian energy interests.
Biden himself said Tuesday the sanctions will attack the “main artery of Russia’s economy” but also noted "there will be costs here in the United States."
‘Maximize pain for Putin’
Tuesday’s action comes after two weeks with regular appearances from Biden to announce new actions against Putin and the Russian economy. The first wave included measures like cutting off "financial ties" and sanctioning certain oligarchs. In the days that followed, the U.S. added more banks and Russian oligarchs to the list and then cut Russia off from SWIFT, the largest global provider of financial messaging services. The West went after oligarchs' yachts next.
Tuesday’s move on oil in particular reverses the Biden administration's previous position, though. Just last week, Press Secretary Jen Psaki noted “we don’t have a strategic interest in reducing the global supply of energy,” in response to a question about a possible oil ban. That “would raise prices at the gas pump for the American people and around the world," she said.
‘Take some time for them to feel the pain’
An area directly under Raimondo’s purview are export controls that officials have promised could cut Russia off from "the 21st century economy."
During Tuesday’s conversation, Raimondo stressed the controls apply to “a very long list designed to deprive Russia of the technology and products that it needs to continue to run its military operation.” However, she acknowledged, “By their nature, these export controls take some time for them to feel the pain.”
This week, the Commerce Department announced that South Korea — a large semiconductor manufacturer — was part of the alliance to implement stringent export control policies.
Raimondo says the effects will accumulate when Russians need to repair anything from a tank to an aircraft to even an ATM. But she put the timeline there at “probably months, not weeks.”
By Ben Werschkul · Senior Producer and Writer
