President Joe Biden announced an historic US ban on Russian oil imports on Tuesday as the latest round of sanctions against Russia for its invasion of Ukraine, but as energy prices continue to surge amid the ongoing conflict, experts now warn that could result in higher inflation and slower economic growth.
In a widely anticipated move Tuesday, President Biden announced a new, unilateral ban on Russian oil imports—the latest punitive actions from the West against Putin’s regime for the ongoing invasion of Ukraine.
Oil prices continued to skyrocket on the news: US benchmark West Texas Intermediate now sits at $126 per barrel, while global benchmark Brent crude is trading at around $130 per barrel.
“While direct imports of Russian oil are a small portion of the total imported by the US, the ban will continue to put pressure on the price of oil and thus pressure the consumer,” explains Lindsey Bell, Ally’s chief markets & money strategist.
Several major economists now predict that the US ban on Russian oil imports—though widely supported by the domestic public—will likely exacerbate decades-high inflation and lead to slower economic growth.
Analysts at both Goldman Sachs and Bank of America estimate that the impact on consumers from surging commodity prices will lead to a 0.3% decline in US GDP growth in 2022.
Experts now predict that in a worst-case scenario, where further restrictions are placed on Russian energy markets essentially isolating them from global markets, oil prices could surge to more than $150 per barrel—even as high as $200 per barrel—for a sustained period of time.