Russian Oil and Gas Loophole Targeted by Lawmakers in New Bill

(Bloomberg) -- Members of Congress are looking at more options to cut off U.S. imports of Russian oil and gas as the country's invasion of Ukraine nears its second week.

Representative Andy Barr, a Kentucky Republican and member of the House Financial Services Committee, said he is introducing legislation that would close a loophole in recently issued sanctions against Russian banks that allow them to conduct transactions related to energy.

“It's time to strike a blow to the heart of the Russian economy and impose a real cost on its prized energy sector as long as the brutal war in Ukraine continues,” said Barr, who added he was calling on President Joe Biden to ramp up domestic oil and gas production, “reducing energy costs at home for Americans and decreasing European dependence on Russian energy abroad.”

Barr's legislation, called the “No Energy Revenues for Russian Hostilities Act of 2022,” would end the general license issued by the Treasury Department to allow energy transactions with Russian banks. It comes on the heels of two measures proposed Tuesday by senators of both parties that would cut off U.S. imports of oil and gas, which account for roughly 3% of total domestic consumption.

The bill has three co-sponsors, all Republican, but touches on an issue that is gaining momentum in Congress as members look for ways to extract a steep price on Russian President Vladimir Putin for his attack on Ukraine.

Representative Victoria Spartz, an Indiana Republican who grew up in Ukraine, said during a press conference Wednesday that the U.S. cannot afford to be “hypocrites” by condemning Russia's invasion but continuing to purchase its oil and gas.

The administration has resisted targeting Russian energy exports out of concern for European allies, who depend heavily on Russian oil and gas, and energy costs at home.

“We and our allies and partners have a strong collective interest to degrade Russia's status as a leading energy supplier over time,” Karine Jean-Pierre, an administration spokeswoman, said.

“That's why we're helping to accelerate diversification from Russian gas and that's why we're denying critical technology inputs that Russia needs to sustain its production capacity in oil and gas,” she said.