Explained | What does US ban on Russian oil means for global economy?

The United States has banned Russian oil imports, ratcheting up pressure on Russia whose invasion of Ukraine entered the 14th day on March 9, leaving hundreds dead and triggering Europe’s worst refugee crisis in recent memory.

After the March 8 announcement by US President Joe Biden, the benchmark Brent crude for May rose to an intra-day high of $131.27 a barrel before settling at $127.98, up 3.9 percent. US crude futures settled at $123.70, an increase of 3.6 percent.

Indications of the impending ban had early on March 8 sent the Brent crude skyrocketing to around $140 a barrel, the highest in 14 years. The last record high was $147 in 2008.

Markets were reacting to US Secretary of State Antony Blinken telling news channels, “We are now talking to our European partners and allies to look in a coordinated way at the prospect of banning the import of Russian oil, while making sure that there is still an appropriate supply of oil on world markets.”

Announcing the measures targeting the energy sector that props up the Russian economy and its war effort, Biden said Ukraine would “never be a victory” for Russian President Vladimir Putin. He said the ban was decided “in close consultation” with allies, especially those in Europe, who depend on Russia for 40 percent of their gas needs.