If that’s the case, then why wait? Joe Biden and his administration have spent nearly a week watching oil-funded Russian troops invading Ukraine, and the Western powers have finally put together a prodigious sanctions effort to punish Vladimir Putin. However, Biden keeps avoiding sanctions on the one funding mechanism that might actually bring Russian troops to a halt.

So why are we to think Biden’s still “very open” to that option?

U.S. President Joe Biden said on Wednesday that “nothing is off the table” when asked if the United States would ban Russian oil and gas after Moscow’s invasion of Ukraine.

Earlier in the day, White House press secretary Jen Psaki said the United States is “very open” to imposing sanctions on Russia’s oil and gas industry at a time when global oil prices touched eight-year highs and supply disruptions mounted. The administration is, however, considering how it could rattle the markets, she said.

Er … haven’t the sanctions imposed on Russia already rattled the markets? The collapse of the ruble and the crash of the Russian stock market has obliterated massive amounts of paper wealth, perhaps into the hundreds of billions of dollars — a necessary outcome, of course, but still a shock. The real reason for Biden’s reluctance is a shock to his own domestic political stock — if oil prices rapidly increase on futures markets, it will dramatically increase inflation at the pumps here in the US.

Unless, of course, Biden follows the advice of Larry Summers and everyone else outside the progressive wing of his party and rolls back all of his regulatory expansions on domestic oil production. Restoring the Keystone XL pipeline would eventually bring lots of Canadian production to US refineries too, which may not matter in terms of immediate supply but which would also have a salutary effect on futures markets. Moves to boost American production are apparently still very much not on the table, even with its strategic value in driving down Putin’s profits and income.

There are signs that Putin’s having trouble selling his oil anyway, however. The Financial Post reports that there appears to be a grass-roots effort to boycott Russian oil. It’s becoming “an embargo in all but name”:

While there are currently no sanctions in place preventing companies from purchasing the nation’s crude, buyers are refusing to take it, and tanker companies are unwilling to ship it. Refineries are racing to secure alternative supplies from other markets.

On Tuesday, Trafigura Group, an oil trading giant, offered to sell a cargo of the nation’s flagship Urals grade for $18.60 a barrel less than an international benchmark. It was the deepest discount ever but still drew no bids. On Wednesday, the market will find out whether Russian oil producer Surgutneftegas PJSC can offload nine cargoes through tenders after two prior attempts failed.

We now have an answer to that:

And the WSJ also confirms a de facto embargo, one that has Russians already feeling desperate:

Acting as if energy were in the crosshairs of Western sanctions officials, refiners balked at buying Russian oil and banks are refusing to finance shipments of Russian commodities, according to traders, oil executives and bankers.

The self-imposed embargo threatens to drive up energy prices globally by removing a gusher of oil from a market that was tight even before President Vladimir Putin attacked Ukraine. Russia, waging war and in need of revenue with its financial system in turmoil, is taking extreme steps to convince companies to buy its most precious commodity.

Before refiners and banks are certain they won’t fall afoul of complex restrictions in different jurisdictions, they won’t do business with Russian oil, traders and others involved in the market say. Market players also fear that measures that target oil exports directly could land as fighting in Ukraine intensifies.

In other words, either Biden’s still leading from behind, or the current economic sanctions will bite the US at the pump either way. So again, why not just formally sanction Russian energy sales — or at least block them in the US, as Joe Manchin keeps demanding?

Speaking of markets, though, Russia kept its closed for the third straight day today, apparently out of fear of a complete meltdown. That’s the longest closure for Russia’s stock market since October 1998 and its banking crisis. Even if it does reopen, it’s not going to look at all the same:

“It’s really the end of the Russian financial market we are used to,” said Leonardo Pellandini, a strategist at Bank Julius Baer. “It just seems like it is becoming an uninvestable market, at least for foreigners. There are too many uncertainties.”

If the US accelerated its own production to fill the gap left by Russian production — even in part — that would likely put the final nail in Putin’s coffin. Perhaps literally.

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