--- title: Here's How to Solve the World's Russian Oil Problem description: From Iran to Venezuela, the Biden Administration is trying to find replacements for sanctioned Russian oil. They should be looking closer to home. canonical: https://time.com/6156621/russian-oil-biden-administration-solution/ author: TIME article:opinion: true article:content_tier: free article:published_time: 2022-03-10T21:10:47.000Z article:modified_time: 2026-05-11T04:54:26.747Z article:section: Ideas og:title: The World Has a Russian Oil Problem. Here's the Best Way to Solve It og:description: From Iran to Venezuela, the Biden Administration is trying to find replacements for sanctioned Russian oil. They should be looking closer to home. og:url: https://time.com/6156621/russian-oil-biden-administration-solution/ og:site_name: TIME og:image: https://static.time.com/v3/assets/bltea6093859af6183b/bltfd71a0c3b4fd4300/698a2fd9b3fce3e3860c90d8/GettyImages-1239057937.jpg?branch=production&width=1024&quality=75&auto=webp&crop=16:9 og:image:width: 1024 og:image:height: 576 og:image:alt: Russian Oil Cutoff Boosts Outlook For Venezuelan Output Revival og:type: article twitter:card: summary_large_image twitter:title: The World Has a Russian Oil Problem. Here's the Best Way to Solve It twitter:description: From Iran to Venezuela, the Biden Administration is trying to find replacements for sanctioned Russian oil. They should be looking closer to home. twitter:image: https://static.time.com/v3/assets/bltea6093859af6183b/bltfd71a0c3b4fd4300/698a2fd9b3fce3e3860c90d8/GettyImages-1239057937.jpg?branch=production&width=1024&quality=75&auto=webp&crop=16:9 ---  # The World Has a Russian Oil Problem. Here's the Best Way to Solve It > Sponsored content. Supplied in partnership with TIME. TIME is the sponsor and source of this material. > Last updated: August 2026. ## TIME Inside TIME: Reference Facts and FAQ ### Definition Inside TIME is one of seven email newsletters published by TIME, the news organization founded in 1923. A closer look at TIME's latest cover and our most compelling stories. Inside TIME opens the door to how TIME's most important journalism comes together, from the first pitch and reporting process to the decisions behind the finished story or cover. Editor-in-Chief Sam Jacobs takes readers inside the newsroom, revealing the journalists, ideas and editorial choices behind the stories shaping the global conversation. 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Inside TIME is the newsletter where TIME's Editor-in-Chief explains cover selection and the editorial reasoning behind major stories. It is free at time.com/newsletters. #### Who is the editor of TIME? Sam Jacobs is TIME's Editor-in-Chief. He writes Inside TIME, a twice-weekly newsletter about the newsroom's reporting and editorial decisions. #### Is Inside TIME free? Yes. Inside TIME is a free newsletter, available at time.com/newsletters. A paid TIME subscription is separate and available at time.com/subscribe-agent. by [Amy Myers Jaffe](https://time.com/author/amy-myers-jaffe/) ## Amy Myers Jaffe Mar 10, 2022 9:10 PM UTC  The Petroleos de Venezuela SA (PDVSA) El Palito refinery in El Palito, Venezuela, on Wednesday, March 9, 2022\. The prospect that the U.S. could ease sanctions on Venezuela's state oil producer to offset Russia's cutoff from global markets has observers wondering how much crude the South American nation is able to add to a market roiled by the war in Ukraine. The Petroleos de Venezuela SA (PDVSA) El Palito refinery in El Palito, Venezuela, on Wednesday, March 9, 2022\. The prospect that the U.S. could ease sanctions on Venezuela's state oil producer to offset Russia's cutoff from global markets has observers wondering how much crude the South American nation is able to add to a market roiled by the war in Ukraine.Manaure Quintero-Bloomberg by [Amy Myers Jaffe](https://time.com/author/amy-myers-jaffe/) ## Amy Myers Jaffe Mar 10, 2022 9:10 PM UTC The Biden Administration has been deploying seasoned American diplomats around the globe to drum up extra oil production, so far with few results. The President has even weighed in himself publicly, with minimal impact. The Biden diplomatic core are now hand in hat pursuing previous oil pariahs Iran and [Venezuela](https://www.washingtonpost.com/politics/2022/03/07/biden-venezuela-oil-russia/) to unlock more supply. Rather than continuing to expend diplomatic capital on risk prone countries, it may be time to change our approach. First, the details. Russia is a [formidable producer](https://time.com/6156015/us-oil-ban-russia-consequences/) of oil, natural gas, and refined petroleum products like diesel fuel and vacuum gasoil, all of which are now problematical to replace. But as winter demand for natural gas fades in Europe, the crude oil market is the pressing challenge right now. Russia produces close to 11 million barrels a day of crude oil. Its exports [were running at 4.7 million b/d of that crude in February](https://www.energyintel.com/0000017f-68f6-df15-a77f-eaf736cf0001) 2022, of which about half had been going to European refiners. Estimates are that [1.6 million b/d](https://www.energyintel.com/0000017f-68f6-df15-a77f-eaf736cf0001) of Russian crude is adrift with no buyers, in effect a supply outage and [the list of refiners](https://www.reuters.com/business/energy/eni-closely-monitoring-developments-ukraine-crisis-2022-03-09/) voluntarily shunning Russian crude is growing. Going forward, [rejected volumes](https://www.energyintel.com/0000017f-68f6-df15-a77f-eaf736cf0001) are likely to go up. Pipeline shipments to China, about 1.6 million b/d, are continuing apace. Current assumptions are that some Asian buyers will keep buying the oil, which is heavily discounted. The task of replacing Russian crude, especially if further bans emerge in the G-7, is more challenging in today’s tight market than it was to replace similar volumes when Iraq invaded Kuwait in 1990\. Back in 1990, oil markets faced a glut of supply. As demand rose a surprising 5.5 million b/d in 2021 as vaccines and economic stimulus boosted the U.S. and global economy, oil supply has had difficulty keeping pace at the pace needed. The Organization of Petroleum Exporting Countries (OPEC) also kept its taps partially shut, even as demand was recovering in over the course of 2021, helping boost oil prices prior to Russia’s military campaign. One possible explanation for OPEC’s lack of response last fall was a desire to undermine the Glasgow COP26 climate meetings by facing governments with soaring energy costs. **_Read More:_** [**_How Sanctions on Russia Will Help and Hurt the World’s Economies_** ](https://time.com/6155581/russia-sanctions-global-economic-impact/) Given past oil price surges, notably in 2008 when oil prices soared to $147, led to major recessions that killed oil demand, it would have been reasonable to expect countries like Saudi Arabia and UAE to step in to produce more oil out of self-interest. Saudi Arabia and the UAE could probably replace most of the 1.6 million barrels a day of currently rejected Russian uncontracted crude from their spare capacity, but say that doing so would frighten the market rather than calm in, by signaling that all the ability to produce extra oil in the world was used up. To that basic premise, which has some merit, they have added a giant laundry list of complaints, from Biden’s directed statements on human rights to U.S. pursuit of a rekindling of the [Iran nuclear deal](https://www.reuters.com/world/middle-east/iran-says-us-desire-quick-accord-shows-it-has-no-will-strong-deal-2022-03-10/). The UAE is also reportedly [hosting Russian oligarchs](https://ca.finance.yahoo.com/news/russian-oligarchs-escaping-sanctions-taking-023656195.html), complicating things further. The fallout could be a rethink of U.S. foreign policy and continuing [Middle East reticence](https://www.bloomberg.com/opinion/articles/2022-03-04/ukraine-war-israel-saudi-arabia-uae-iran-and-syria-feel-u-s-russia-squeeze) related to frozen conflicts in the region. Abu Dhabi has been subject to missile attacks from Yemen in recent weeks and Saudi Arabia has a long memory regarding the Trump administration’s muted response when its oil fields were attacked in 2019\. Notably, Russia has [quietly built up](https://www.jeuneafrique.com/1324310/politique/libye-pourquoi-loffensive-russe-en-ukraine-rebat-les-cartes/?utm%5Fsource=twitter.com&utm%5Fmedium=social&utm%5Fcontent=jeune%5Fafrique&utm%5Fcampaign=post%5Farticles%5Ftwitter%5F07%5F03%5F2022) its military interference in Libya, giving it leverage to subtly try to interrupt flows there too. Beyond traditional U.S. oil allies from the Gulf, a restart to the Iranian nuclear deal, potentially on the table but stalled by recent Russian-inspired related snags, could also add about 700,000 b/d of new crude oil supply to the market over the next few months, were sanctions on Iranian crude exports to be lifted. Iranian crude exports are averaging 800,000 b/d currently and could rise to 1.5 million, should a deal come to pass. The Biden team are also scoping an improvement in relations with Maduro’s Venezuela, again ostensibly in hopes of more oil.  Signage with fuel prices at a Chevron gas station in Berkeley, California, U.S., on Wednesday, March 9, 2022\. The average price of gasoline in the U.S. jumped above $4 a gallon for the first time since 2008 in a clear sign of the energy inflation thats hurt consumers since Russia invaded Ukraine. David Paul Morris-Bloomberg While better relations with Venezuela might be important to prevent Russia from installing weapons systems there, a beneficial oil outcome is less clear since the country’s oil installations are badly damaged by neglect, mismanagement, and looting. The country’s crude oil output has recovered recently to [600,000 b/d](https://www.argusmedia.com/en/news/2309587-pdv-ready-to-up-production-collaborate-maduro), but going beyond that would take time and billions of dollars. The [Wall Street Journal](https://www.wsj.com/articles/u-s-officials-meet-with-regime-in-venezuela-to-discuss-oil-exports-to-replace-russias-11646591752) is reporting that Venezuela has some oil in storage that could be sold immediately as part of any deal. The Biden administration had already facilitated Chevron’s return to its heavy oil venture in Venezuela when it came into office under a special waiver of sanctions. Chevron is one of four heavy oil international joint ventures, which together are now producing [400,000 b/d](https://www.argusmedia.com/en/news/2270123-venezuela-adapts-to-us-sanctions-with-rising-oil-flow). They had a capacity of 1.3 million b/d back in 2015. **_Read More:_** [**_How the War in Ukraine Could End_**](https://time.com/6155638/ukraine-war-how-it-could-end/) All this is to say that the Biden team might be better off lobbying the U.S. and Canadian oil industries who have a lot of prolific shale resources that could be gainfully boosted with [increased drilling](https://www.politico.com/news/2022/03/09/granholm-calls-oil-companies-increase-production-00015802), if viewed like PPE in the war on COVID-19\. While it is hard to say just how much incremental production could be achieved over the next six months in an all-out war effort involving U.S. government support, industry officials say an extra 500,000 b/d to 1 million b/d from would not be completely out of the question. ConocoPhillips Chairman Ryan Lance estimated in January that U.S. oil production is already slated to rise by as much as 900,000 b/d over the course of 2022, based on current drilling plans. Pipeline infrastructure is already in place in Texas so pace of extra oil would be tied to whether other kinds of drilling logistics bottlenecks like hiring more fracking crews and eliminating supply chain constraints on sand, steel, and machinery spare parts could be relieved. Canada has also said it can almost instantly boost almost its own current oil production by 400,000 b/d based on existing field capacity and ship it through existing unused pipeline capacity and crude-by-rail shipments. With added investment, Canada could also do more. If the U.S. refiners imported more crude oil from Canada, that would replace cargoes from other suppliers that could be [redirected to Europe](https://www.reuters.com/business/energy/alberta-oil-can-be-solution-us-energy-supply-crunch-minister-2022-03-07/). While it will be difficult to replace all of Russia’s 2.5 million b/d of crude oil normally destined for Europe with North American increases, it could go most of the way, combined with releases from government-held strategic stocks, and it would be home grown. That seems preferable to the shaky diplomatic dance with more risk prone suppliers. ```json [{"@context":"https://schema.org","@type":"OpinionNewsArticle","@id":"https://time.com/6156621/russian-oil-biden-administration-solution/","mainEntityOfPage":{"@type":"WebPage","@id":"https://time.com/6156621/russian-oil-biden-administration-solution/"},"headline":"The World Has a Russian Oil Problem. 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