On Sunday, the G-7 announced its member countries’ commitment to ending their “dependency on Russian energy, including by removing or banning the import of Russian oil.”
In a new Yahoo Finance Live interview on Monday, Assistant Treasury Secretary Wally Adeyemo said the United States would do its part to help nations achieve this goal. “One of the things we are committed to doing is helping to provide energy to Europe,” to make the transition as quickly as possible, he said.
The G-7 decision would be perhaps the most dramatic step yet to isolate Vladimir Putin and his economy from the West. But it would force countries heavily dependent on Russian energy – notably Germany – to reorganize their economies and take a step they have been unable to do so far.
The G-7 has promised to do so “in a timely and orderly manner”, but the exact manner remains unclear.
For now, Adeyemo said, the Biden administration “is appealing to [U.S. oil] businesses to produce more energy because we want to keep costs down” before moving to clean energy in the coming decades.
Also on Sunday, the White House unveiled new sanctions against Russia, including actions against leaders of Gazprom and other companies to further punish Moscow for its war on Ukraine.
“This is exactly what we expect from Europe”
Adeyemo, who serves as second-in-command at the Treasury under Secretary Janet Yellen, said the energy aid could resemble previous coal and liquid natural gas efforts.
The United States has already banned the import of Russian oil, gas and coal, but it will be more difficult to wean Germany off Russian energy. Of all the G-7 countries – Canada, France, Germany, Italy, Japan, the UK and the US – Germany has the most ties to Russia, with Putin’s nation supplying more than a third of the gas European and 34% of German crude. oil in 2021.
Adeyemo recently traveled to Berlin to discuss, among other topics, “ways to increase costs for Russia while mitigating the ripple effects”, he said.
The recent example of liquid natural gas provides another caveat to the limits of the amount of energy America can supply. In March, the European Union and the United States unveiled an agreement to increase LNG exports to Europe by at least 15 billion cubic meters in 2022. The shipments will help Europe buy less from the Russia, but the total is far from enough to offset the 155 billion cubic meters of natural gas imported in 2021 from the country.
Nonetheless, Adeyemo promised that Russia would feel the bite of oil exports in the coming months.
“Throughout Russia’s invasion of Ukraine, the United States, Europe and our allies around the world have taken steps to reduce Russia’s resources to ensure they have fewer resources to wage their war against Ukraine,” he said. “This is exactly what we expect from Europe as part of our alliance.”
Ben Werschkul is a writer and producer for Yahoo Finance in Washington, DC.
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