President Joe Biden said the U.S. will ban imports of Russian fossil fuels including oil, a major escalation of Western efforts to hobble Russia’s economy that will further strain global crude markets.

“We’re banning all imports of Russian oil and gas and energy,” Biden said Tuesday at the White House. “We will not be part of subsidizing Putin’s war.”

The U.S. move will be matched in part by the U.K., which will announce a ban on Russian oil imports on Tuesday, though it will continue to allow natural gas and coal from the country. Other European nations that rely more heavily on Russian fuels will not participate. The scope of Biden’s action was not immediately clear, including exceptions and the impact on shipments already in transit.

Biden’s move is a significant step in his sanctions campaign against Russia after its invasion of Ukraine. While so-called self-sanctioning by the oil industry has limited some purchases of Russian barrels, an outright U.S. ban would further weigh on the market and increase volatility.

Eoin Treacy's view

If sanctions are to work, they need to hit the target where it hurts. If Russia is to be chastened, more of the world needs to stop buying its products. That’s going to come with massive dislocations to the global economy. It’s a necessary sacrifice because appeasement does not work.

The world looked away when Russia annexed Crimea, and that only emboldened them to go for the larger prize. The invasion was a cold calculated move; seeking to hit the West at its inward-looking weakest. Russia needs to be disabused of that notion quickly if a wider conflict is to be avoided.

This quote from Wang Yi, China’s foreign minister sounds a lot like “he’s a bastard but he’s our bastard.” 

China-Russia relationship is grounded in a clear logic of history and driven by strong internal dynamic, and the friendship between the two peoples is rock-solid. There is a bright prospect for cooperation between the two sides. No matter how precarious and challenging the international situation may be, China and Russia will always maintain strategic focus and steadily advance our comprehensive strategic partnership of coordination for a new era.

中俄关系发展有着清晰的历史逻辑，具有强大的内生动力，两国人民的友谊坚如磐石，双方的合作前景广阔。不管国际风云如何险恶，中俄都将保持战略定力，将新时代全面战略协作伙伴关系不断推向前进。

There is strong precedent for China stepping in to buy prize assets when prices are low. Russian assets are trading at fire sale prices right now. That is true of both companies and commodities.

China knows they need capital and must feel confident it will not be cut off from Swift. It makes sense for a sovereign to buy now because wars do not last forever, and resources in the ground are not going anywhere.

There is no denying we are in an increasingly polarised world. Unwinding from Russia is causing considerable dislocations and massive commodity price volatility. Eventually, a similar unwind from China will be necessary and that will be much more unsettling.