US bans import of Russian oil

US President Joe Biden on Tuesday banned the import of Russian crude oil in retaliation for Moscow's military operation in Ukraine, a move that is expected to further increase surging oil prices in the US and add to inflation already at its fastest pace in 40 years.

News of the ban sent US gasoline prices to their highest level ever recorded, with a gallon of regular selling for an average of $4.17 Tuesday, up from $3.62 a month ago and $2.77 a year ago.

A month ago, oil was selling for about $90 a barrel. Now prices are surging around $130 a barrel.

Wall Street's main benchmarks attempted a comeback into Tuesday's close but turned lower.

Russian President Vladimir Putin reacted to Biden's announcement with a decree instructing his cabinet to produce a list of items to stop importing and exporting until the end of 2022. Russia also this week threatened to cut the flow of gas via the Nord Stream 1 pipeline to Europe in response to the West's financial penalties, Bloomberg reported.

A poll by The Wall Street Journal published Tuesday showed Americans overwhelmingly support a ban, with 79 percent favoring it and 13 percent opposed. The ban had support from 77 percent of Republicans and 88 percent of Democrats.

The Journal poll surveyed 529 registered voters from March 4-7 about their opinion on halting Russian energy imports.

Shortly after Biden's announcement, the UK, which imports 8 percent of its oil from Russia, announced it will phase out Russian oil imports by the end of the year. That will allow enough time for companies to adjust and consumers to be protected as alternative supplies are found, Prime Minister Boris Johnson said in a statement.

The European Commission — the executive arm of the European Union, which is heavily dependent on Russian oil and gas — announced Tuesday a plan to cut gas imports from Russia by two-thirds this year.

The White House said the ban on new purchases was effective immediately, but the administration was allowing a 45-day "wind down" for delivery under existing contracts.

Russia produces about 11 percent of the world's oil, or roughly 10.5 million barrels a day.

A ban by Russia on oil and natural gas would hurt Europe. Russia provides about 40 percent of Europe's natural gas for home heating, electricity and industry uses and about a quarter of Europe's oil.

Federal Reserve Chair Jerome H. Powell said last week that the consequences of Russia's military operation in Ukraine could ultimately amount to a "game changer''.

"The risk of a policy error, and therefore a US recession, is rising quickly," Joseph LaVorgna, chief economist for the Americas at Natixis, said in a note to clients, The Wall Street Journal reported.

But David Bahnsen, chief investment officer of the Bahnsen Group, said in a note: "Surging oil prices can't singularly trigger a recession and it would take more than sky-high energy prices for the consumer impact to become recessionary."

"The United States economy can fully handle any of the challenges associated with higher oil prices," Jason Furman, a Harvard professor and former top economic adviser to President Barack Obama told NBC News. "But it will bring some challenges. We're going to have higher prices at the pump, and there's no way around that.''

Senate Minority Leader Mitch McConnell made it clear that Republican lawmakers would continue to criticize Biden for rising gasoline prices.

"I expect our Democratic friends will now try to blame the entire increase in prices on our efforts to punish Russia. But don't be fooled," McConnell of Kentucky said. "This was more than a year in the making."

Speaking from the White House, Biden warned energy companies against "price gouging" and told them not to "exploit this situation or American consumers".

He vowed to use his authority to minimize the impact on Americans and assailed companies that are trying to exploit consumers with price gouging.

If Russia were eventually shut off from the global market, countries such as Iran and Venezuela might be "welcomed back" as sources of oil, said Claudio Galimberti, senior vice-president of analysis at Rystad Energy. Such additional sources could, in turn, potentially stabilize prices, he told NBC News.

A team of Biden administration officials were in Venezuela over the weekend to discuss energy and other issues, White House press secretary Jen Psaki said.

Both Republican and Democratic senators warned the Biden administration from seeking any oil import deal from the Nicolas Maduro government in Venezuela.