The sanctions regime slapped on Russia by the US and its allies continues to feature one glaring omission: an embargo on oil and gas, which accounts for nearly half of Russia’s export revenue.
When asked on Wednesday about sanctioning Russian oil exports, President Joe Biden said, “Nothing is off the table.” Biden faces mounting pressure from Senators like West Virginia Democrat Joe Manchin, who is partnering with Alaska Republican Sen. Lisa Murkowski on a bill that would ban the import of Russian oil.
While an oil and gas embargo would help cripple Russia’s financial resources, the nation’s “stranglehold” on the Western energy supply may prove too damaging for the US and its allies, says Bill Browder, an asset manager who for years specialized as an investor in major Russian firms, including the state-owned natural gas giant Gazprom.
Browder told Yahoo Finance he supports an embargo but understands the reluctance from countries reliant on Russian energy.
Russian President Vladimir Putin “kind of has us in a stranglehold, which is why the energy sector has been more or less left untouched,” says Browder, the CEO of Hermitage Capital Management and a longstanding critic of Putin.
“It’s going to be hard — it’s going to be a tough balancing act — because 40% of German households rely on Russian gas, 100% of Italian households, 100% of Australian households,” he adds.
Even in the absence of an embargo on Russian oil and gas, prices have spiked in recent days. U.S. oil prices on Wednesday surged to their highest level in over a decade, as the global benchmark Brent exceeded $113 per barrel.