On Sunday, the G-7 announced a commitment by member states to end their “dependence on Russian energy, including by phasing out or banning imports of Russian oil.”
On Monday, Deputy Treasury Secretary Wally Adeyemo said in a new Yahoo Finance Live interview that the US will do its part to help nations meet that goal. “Among other things, we are committed to providing Europe with energy,” he said, in order to make the transition as quick as possible.
The move by the G-7 would be perhaps the most dramatic move yet to isolate Vladimir Putin and his economy from the West. But it would require countries with a heavy reliance on Russian energy — notably Germany — to retool their economies and take a step they haven’t been able to do before.
The G-7 promised to do this “in a timely and orderly manner,” but exactly how remains unclear.
Deputy Finance Minister Wally Adeyemo, pictured at a news conference in Brussels in March, recently spoke about oil. (Agency Dursun Aydemir/Anadolu via Getty Images)
Right now, Adeyemo said, “the Biden administration is calling [U.S. oil] companies to produce more energy because we want to keep costs down” before switching to clean energy in the coming decades.
Also on Sunday, the White House unveiled new sanctions against Russia, including measures against Gazprom executives and other companies, to further punish Moscow for its war against Ukraine.
“That’s what we expect from Europe”
Adeyemo, who serves as Treasury Secretary under Secretary Janet Yellen, said the energy aid could look similar to previous coal and liquid natural gas efforts.
The US has already banned imports of Russian oil, gas and coal, but dissuading Germany from Russian energy is becoming more difficult. Of all the G-7 nations – Canada, France, Germany, Italy, Japan, Britain and the US – Germany is most closely tied to Russia, with Putin’s nation supplying more than a third of Europe’s gas and 34% of Germany’s crude oil in the country year 2021.
Adeyemo recently traveled to Berlin to discuss, among other things, “ways to increase costs for Russia while mitigating spillover effects,” he said.
The story goes on
The recent example of liquid natural gas is another cautionary tale about the limits of how much energy America can provide. In March, the European Union and the US announced an agreement to increase LNG exports to Europe by at least 15 billion cubic meters by 2022. The supplies will help Europe buy less from Russia, but the total is far from enough to offset the 155 billion cubic meters of natural gas imported from the country in 2021.
Still, Adeyemo promised that Russia would feel the bite of oil exports in the coming months.
“During the Russian invasion of Ukraine, the United States, Europe and our allies around the world took steps to reduce resources available to Russia to ensure they have fewer resources to wage their war against Ukraine.” , he said. “That is what we expect from Europe as part of our alliance.”
Ben Werschkul is a writer and producer for Yahoo Finance based in Washington, DC.
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