12:52 P.M. EST
MODERATOR: So thanks, everyone, for joining on short notice. So this is a background press call on the President’s announcement earlier today on the steps we’re taking to hold Russia accountable.
This call is on background, attributable to a “senior administration official,” and embargoed until the call concludes. For your awareness and not for reporting, the speaker on this call is [senior administration official].
So, with that, I’m going to turn it over to [senior administration official] for some quick remarks, and then we can take some questions.
[Senior administration official], over to you.
SENIOR ADMINISTRATION OFFICIAL: Okay, thanks, [senior administration official]. Hi, everybody. I’ll make a few comments and happy to take your questions afterwards.
America is united in its resolve to stand up to Putin. And there’s broad support across the country for degrading the strength of Putin’s economy and war machine through energy exports.
Today, President Biden signed an executive order to ban the import of Russian oil, liquefied natural gas, and coal to the United States. This is a significant action with widespread bipartisan support that will further deprive President Putin of the economic resources he uses to fund his needless war of choice.
Let me give you some details on the mechanics, our consultation with allies, and also the domestic implications.
First, in terms of mechanics: Our ban blocks any new purchases of Russian crude oil and certain petroleum products, liquefied natural gas, and coal, and winds downs the deliveries of existing purchases that have already been contracted for. It also bans new U.S. investment in Russia’s energy sector, which will ensure that American companies and American investors are not underwriting Putin’s efforts to expand energy production inside of Russia.
And finally, Americans will be prohibited from participating in foreign investments that flow into Russia’s energy sector.
Second, in taking this action, we consulted with European allies closely, but we do not expect them and did not ask them to join us. The United States is able to take this step because of our strong domestic energy production and infrastructure. And we recognize that not all of our Allies and partners are currently in a position to join us.
And specifically, let me maybe add two points of detail on this point. First in 2021, Russian oil was just under 10 percent of our overall imports of oil but a third of Europe’s imports.
As of last year, Europe imports more than six times more oil from Russia than we do — about four and a half million barrels for Europe versus seven hundred thousand barrels of oil for the U.S. per day.
Second, the U.S. produces far more oil domestically than any of our allies. In fact, we’re a net exporter, the leading oil and gas producer in the world. And we produced more oil and gas in the first year of President Biden’s term than in his predecessor’s first year.
Third, in terms of domestic impact, the reality is Putin’s unprovoked and brutal war has led to higher energy prices and raised costs for Americans at home — about 75 cents at the gas pump — since Putin began to amass troops at the Ukrainian border in early November.
Under President Biden’s leadership, the U.S. will continue to mitigate the pain American families feel at the pump and reduce our dependence on foreign oil and fossil fuels. And let me make three points in this regard.
First, the administration has already committed to releasing more than 90 million barrels from our Strategic Petroleum Reserve this fiscal year. This is the result of intensive, around-the-clock coordination and consultation by President Biden. And it led to IEA member countries agreeing to a collective release of an initial 60 million barrels of crude oil from our Strategic Petroleum Reserves, with the U.S. committing about half of that emergency sale.
We also remain in active conversations with a range of energy producers and energy consumers on further steps we can take to ensure a global supply — a stable global supply of energy.
Second, U.S. oil and gas production is approaching record highs while thousands of drilling permits on federal lands go unused. So federal policies are not limiting the production of oil and gas. To the contrary, the Biden administration has been clear that in the short term, supply must keep up with demand at home and around the world while we make the shift to a secure clean energy future.
We are one of the world’s largest producers with a strong domestic oil and gas industry. Natural gas production in the U.S. has never been higher, and crude oil production is expected to hit a new record high next year.
As major energy company leaders have themselves said, they have the resources and the incentives they need to further increase production in the U.S.
Third, in the long run, the way to avoid high gas prices is to speed up, not slow down, our transition to a clean energy future. The reality is we can’t drill our way out of dependence on a global commodity that’s controlled, in part, by foreign nations and their leaders, including Putin. The only way to eliminate Putin’s and every other producing country’s ability to use oil as an economic weapon is to reduce our dependency on oil.
So even as President Biden does everything in his power in the short term to make sure we can readily access the oil — readily access oil and gas, we need to protect American consumers and allied countries, including through greater U.S. domestic production.
This crisis reinforces our resolve to make America truly energy independent, which means reducing our dependence on fossil fuels.
Last point I’ll make: You know, this announcement builds on unprecedented economic costs the U.S. and our allies and partners have imposed on Russia.
Just to remind everyone: As a result of our historic coordination, Russia has become a global economic and financial pariah. Over 30 counties, representing well over half the world’s economy have announced sanctions that impose immediate and debilitating economic costs on Russia, cut off its access to high tech, and sap its growth — growth potential and weaken its military for years to come.
You all have seen the Russian ruble is now worth much less than a penny; it’s hit an all-time low after losing well over half its value since Putin announced his further invasion of Ukraine.
By isolating Russia’s Central Bank from the global financial system, we’ve disarmed his war chest of foreign reserves and he can do very little to slow the freefall of his currency.
By blocking transactions with and freezing the assets of his largest banks, we’ve shut down Putin’s ability to do business with the world.
And the U.S. and governments all over the world are going after Putin’s assets and those of his cronies and their families by identifying where they are and freezing them in our respective jurisdictions. And that includes their yachts and luxury apartments and money and other ill-gotten gains.
Let me stop there. And I’d be happy to take your questions.
MODERATOR: Great. Thanks, [senior administration official]. So, if you have a question, please raise your hand, and then I will just call on folks that way.
So I think let’s just go ahead and start with Andrea Shalal from Reuters, please.
Q Thank you so much, [senior administration official], for doing this. U.S. — does this affect — take effect immediately? And you — you mentioned about, you know, the sort of blocking new purchases, but winding down deliveries that are already contracted. When — you know, how much
volume is there in terms of what’s are already contracted?
SENIOR ADMINISTRATION OFFICIAL: Yeah. Hi, Andrea. So, the ban is immediate. We block any new purchases of Russian energy. And we do allow, though, for wind downs of deliveries for existing purchases that were already contracted for. So that means, just to be clear with you, there are no new contracts that will be allowed. And for existing contracts, we are allowing a 45-day wind-down period. And I would refer you to the — to the Treasury Department for exactly how that will get executed.
MODERATOR: Great. Let’s go to Jennifer Jacobs from Bloomberg, please.
Q Thanks, [senior administration official]. On Venezuela, do the plans to license imports to Venezuelan oil, does that replace — could that replace the lost Russian barrels?
SENIOR ADMINISTRATION OFFICIAL: Yeah, so I don’t have — I don’t have anything to say with you about Venezuela. Sorry, can you can you hear me? Hello?
MODERATOR: Yeah, we can hear you, [senior administration official].
(The call experiences technical difficulties.)
SENIOR ADMINISTRATION OFFICIAL: I can hear you. Yeah, sorry. I don’t know — I think I might have gotten cut off.
Jennifer, the question was on Venezuela, right? I think it was on Venezuela.
So, let me just say on that — on that trip that you’re referring to that was intended to discuss a range of issues, including the health and the welfare of detained U.S. citizens.
And those meetings are ongoing, so I’m not going to — I’m not going to share any more detail at this point.
MODERATOR: All right. Let’s do Tom Franck from CNBC, please.
Q Hi, [senior administration official]. I wanted to ask: CEA Chair Cecilia Rouse talked about this earlier in the week that any U.S. ban would be introduced in a way that would minimize disruption to global markets and minimize upward pressure on inflation. I’m just wondering if the White House has any estimates on how this ban could impact headline CPI, you know, over the next year or so.
SENIOR ADMINISTRATION OFFICIAL: Yeah, I’ll step back on this one and just say, you know, the President, he has said many times now that dictators need to pay a price for their aggression or they’ll just cause more chaos and increase costs and threats for America and people all over the world.
So that’s — that’s why he’s decided to stand up to Putin’s aggression. And he has told the truth that this is not going to be painless for Americans.
I’m not going to give you a specific estimate on what will happen to gas prices. But let me — let me say the reason energy prices are rising right now is because of Putin’s choices and this needless war, and the risk that he could escalate further.
Of course, in addition to our resolve to hold him accountable, prices at the pump — at the gas pump are now up about 75 cents since Putin started to amass troops at Ukraine’s border. The price of Brent crude oil is up about $50 a barrel as well since that time.
So what we’re seeing now is a result of fears of Putin’s ongoing aggression escalating and the consequences of his actions.
But we think this is a time for American resolve. There will be costs for standing up to Putin, but we’re doing all we can to mitigate those costs.
MODERATOR: Great. Let’s do Sean Sullivan from the Washington Post, please.
Q Thanks very much. Just to follow up on that, I know you said you didn’t want to go into what specific projections might be for where gas prices might be. But is that because the White House does not know or has not projected what this could mean for gas prices in the coming months, or that you just don’t want to share that?
And as a related question, how confident is the White House at this point that Americans will be willing over time to accept whatever increases result in gas prices at the pump as a result of this decision?
SENIOR ADMINISTRATION OFFICIAL: Yeah, I can share — you know, I’ll share some of the thinking. So, first thing to point out is that we’re not a major importer of Russian oil; it’s about 700,000 barrels a day. And remember that we’re a major producer of crude oil, usually — usually occupying the top spot. There are certain months where we’re number two, but we are a leading producer of crude oil, and we can produce much more. The leases are in place; the permits are available.
So, actually, it’s a time for oil and gas companies to work with Wall Street to unleash our productive capacity. Price signals are giving every incentive that producers need to invest in America’s energy security, our energy reliability, our energy sustainability. And that will cut our vulnerability to tyrants like Putin that influence global oil prices and gas prices at home. So it’s time to end that influence. And I can assure you our allies and partners around the world fully agree with us.
But this action alone, I want to emphasize once more: We are we are not a major importer of Russian oil, but we are a major producer of energy at home.
MODERATOR: Thanks. Let’s go to — sorry, I’m trying to make sure that I get the most range. Let’s do James Politi from the Financial Times, please.
Q Hi, thank you so much. Just a quick question. Would the U.S. support imposing secondary sanctions on Russian oil and energy products even though the Europeans haven’t kind of gone along with the initial ban?
And can you — we saw that the UK came out in support of the — of a winddown, basically, of their Russian oil purchases. Have you been discussing this with Japan as well?
SENIOR ADMINISTRATION OFFICIAL: Hi, James. We’ve been discussing this action extensively with all of our partners, and not just those in Europe, but also our G7 partners and partners and allies beyond the G7.
And what’s clear not just from those conversations, but from conversations over a longer period of time, is that countries are in different circumstances. And the United States is particularly capable of taking this action given the level of imports from Russia, in energy, and the amount of production of energy at home.
Not all countries are in the same circumstance, and we recognize that. They’re going to have to make their own evaluation. I haven’t seen specifically what the UK has done. I know they’ve announced something in this area, but I have not seen the specifics, James.
But I expect that as countries do their analysis and as they consider their options, we’ll hear from them.
But again, we are in a — we know that we are in very different circumstances than most of our allies and partners across the world.
MODERATOR: And, sorry, James, can you repeat your first question? [Senior administration official], I don’t know if you answered that one.
Q I just had a quick question on secondary sanctions. I saw on the factsheet that the U.S. is banning Americans from basically doing anything to finance investments in the Russian energy sector.
SENIOR ADMINISTRATION OFFICIAL: Oh, I see. Okay. Yeah. I mean, I was answering your question on secondary sanctions by saying, you know, we recognize other countries are in different circumstances.
But with respect to the provision that you’re mentioning, James, this is the clause that essentially says Americans are going to be prohibited from participating in foreign investments that flow into Russia’s energy sector. There’s a foreign consortium that’s putting money into Russia’s energy sector. Americans cannot participate in that consortium.
Does that make sense?
Q Yeah, that makes sense. I know they’re two slightly separate issues, but that clarifies it. Thank you.
SENIOR ADMINISTRATION OFFICIAL: Yeah. So it’s — not only can Americans not invest directly in Russia’s energy sector, they also can’t participate in foreign investments that are going into Russia’s energy sector.
MODERATOR: Great. Thanks. Let’s do — I think we have time for probably a couple more. So can we do Ed Lawrence from Fox News, please?
Q Oh, yeah. Thank you. Thanks for doing this. Just a quick clarification.
So you were saying that the best way to get oil prices and gas prices down globally is to speed up the transition to clean energy. So are you saying that Americans should expect to deal with higher gas prices for — you know, until 2030, when we get off — when the administration is looking at that net zero?
SENIOR ADMINISTRATION OFFICIAL: Oh, not at all. There’s a transition. And to make that transition as orderly as possible, we need to continue to work with major energy consumers around the world to consider releasing reserves to ensure stable energy supplies. We need to continue working with major energy producers across the world that have spare capacity to produce more. And we need our domestic oil and gas industry to use their leases, use their permits, use financing from Wall Street to respond to price signals and continue increasing their production.
This is a time for Wall Street to step up, for oil and gas companies to step up and invest in America’s energy future.
Q Just quickly, as a follow: Is there a timeline, then, you’re looking at for when Americans can see gas prices come back down based on all the things the administration is doing now?
SENIOR ADMINISTRATION OFFICIAL: Well, that — I can’t give you a prediction because much of what you’re seeing in energy markets right now is the result of Putin’s aggression and his brutal war. And I can’t get into his mind and give you a prediction on what he’ll do next, but we’re ready for anything.
MODERATOR: Great. And I think we have time for one more, so let’s do Aurelia from AFP, please.
Q Hi. Thank you so much for doing this. I have two related questions. You said the United States did not ask Europeans to take this step. Are there European countries that asked you not to — not to take this step?
And maybe a broader question. Looking forward, as you say, all countries have different circumstances. So do you expect it to become more difficult for all allies to find common ground for the next sanctions, the next steps?
SENIOR ADMINISTRATION OFFICIAL: Yeah, no, I would say there is still remarkable — I mean, I don’t think it’s an overstatement to say historic unity across the world, in terms of our willingness and our resolve to impose the most severe set of economic costs that have ever been imposed on a country as large as Russia.
If you did — I think, actually, it was Bloomberg that added up the number of sanctions that have been imposed on Russia. And if you look at the breadth and the number, it’s remarkable how unified the whole world is to stand up to what Putin is doing.
So that’s the sentiment. That’s the — that’s the type of discussion that’s been taking place in general and specifically with regard to the step we’re announcing today.
And I don’t want to speak for other countries. They’re going to have — you know, they’re all evaluating their circumstances with different tools and different authorities. We’re all imposing the most severe costs on Russia and the most severe financial sanctions that have ever been imposed in economic history.
MODERATOR: Great. All right. Well, I’m going to let [senior administration official] go. And thanks, everyone, for joining on short notice. If we did not get to your question, please reach out to Vedant and I, and we will make sure to get back to you. And thanks again for your time.
As reminder, this call was on background, so if you joined late: background, senior administration official. And the embargo has now lifted.
1:13 P.M. EST