Imposing an embargo and severe sanctions on oil

Imposing an embargo and severe sanctions on oil

Currently, the White House and the US Congress are using a very good tool to sanction Russian oil and gas, while protecting American citizens from high pump prices: paying Big Oil.

Such a push is growing in Washington right now to impose an embargo and harsh sanctions on Russian oil and gas as a way to weaken Putin’s power in the midst of the invasion of Ukraine.

In the economic context, the move would have a strategic impact: fossil fuels account for 60% of Russia’s exports and 40% of the federal budget. Oil and gas are now fueling Putin’s war machine, writes Independent.

Politically, there is another reason why Republicans want to impose such an embargo and sanctions. Republicans want to blame President Biden for high gas prices and drive higher fossil fuel production in the United States.

But the strategy is cynical, because the Republican “solution” will do nothing to reduce pump prices or the cost of home heating bills.

The Biden administration fears it will pay a huge political cost

US oil and gas production is currently near record levels, and the industry already has access to millions of acres of land on which to drill.

In this regard, even if the Republicans do not have their own solutions, the Biden administration is aware that if prices rise, it will pay a huge political cost. Hence his reluctance to engage in an embargo.

In her opinion, “We have no strategic interest in reducing the global energy supply, which would only increase the prices at the gas station for Americans,” said spokeswoman Karine Jean-Pierre.

An exceptional Big Oil profit tax

In the current competitive context, Republicans already believe they have cornered the Democrats. But there is a way out that would help consumers, reduce US dependence on fossil fuels, bring major benefits to the climate, and hold oil corporations accountable for their cooperation with Putin: an exceptional Big Oil profit tax.

The idea behind a profit tax for Big Oil is simple. When a corporation makes huge profits under certain circumstances, the government can claim a percentage of those profits through an additional tax. An exceptional tax makes sense especially when those profits have been made on people’s backs.

In this case, the reason for a special profit tax for Big Oil is particularly clear. Oil companies are currently making the biggest profits, not because of any innovation, but because of the faster economic recovery than one would expect after the Covid pandemic, but also because of the war in Ukraine, a crisis to which Big Oil companies contributed, collaborating with Little to expand oil and gas production.

Add to that the damage these companies are doing to the climate and the massive subsidies they are already receiving from the federal government. Not surprisingly, claims for such a tax in the United Kingdom and Europe have already risen in recent weeks.

The simplest way Congress and the White House can punish Putin

However, an exceptional Big Oil profit tax is not the only way to quickly reduce its dependence on oil and gas and help protect consumers from future price increases.

So this tax combined with the sanctions on Russian oil, an exceptional profit tax, is the easiest way for Congress and the White House to act now to punish Putin, while offsetting any costs to American families.