As the Biden administration considers escalating sanctions against Russia for its invasion of Ukraine, a major roadblock stands in the way: the American consumer.
For the first time in history, American drivers are starting on summer vacations with fuel prices averaging more than $5 per gallon. Inflation is at its highest level in four decades, thanks to rising oil and natural gas costs, which are driving up prices for food, energy, and housing.
Tougher sanctions against Russia, one of the world’s largest oil and gas suppliers, would almost certainly exacerbate the problem.
“It’s like kicking people when they’re down,” said Ellen Wald, an energy historian and senior fellow at the Atlantic Council think tank, of the possibility of price hikes.
Export curbs, a US embargo on Russian energy imports, and a partial EU ban on energy imports have already been implemented by the US and Europe against Russia’s oil exports, which are the lifeblood of its economy and military machine.
Price limitations, according to some authorities, are one of several options for deepening Russia’s economic agony without further spiking global oil markets because only revenues, not quantity of oil coming to market, would be reduced.