Russia’s Ukraine invasion is turning out to be an embarrassment for US President Joe Biden. He seems clueless in face of the Russian onslaught in Ukraine. So, to show signs of being the crowned one, Biden banned the import of Russian oil, only to rupture himself.
Read more: For the first time, Zelensky admits that Ukraine is losing the war
Biden knew that the gasoline prices are bound to rise, but still went ahead with his decision. Through this debacle of a policy, he is ultimately cancelling his sanctions on Russia by prompting Americans to use EVs, which will be manufactured on Russian nickel. And that too at a time when nickel prices are going through the roof.
Kamala Harris asks Americans to use EVs
The fact remains that inflation is already a major issue in the United States. Now, Americans won’t be amused if they have to pay a few extra bucks at the pump. Therefore, Vice President Kamala Harris and Transportation Secretary Pete Buttigieg came up with a unique solution- use green energy and electric cars to evade inflation.
Harris said, “We are all in the midst of a turning point. We have the technologies to transition to a zero-emission fleet.” She added, “We can address the climate crisis and grow our economy at the same time.”
Biden himself has pushed the same agenda. The US President said, “Loosening environmental regulations won’t lower prices. But transforming our economy to run on electric vehicles, powered by clean energy, will mean that no one will have to worry about gas prices. It will mean tyrants like Putin won’t be able to use fossil fuels as a weapon.”
Read more: Biden steps back and refuses to take up Putin’s challenge. But Putin is not done with him
How promoting EVs in the US helps the nickel industry in Russia
The US oil imports from Russia were valued below $5 billion in 2021. This amounted to just 3.5 per cent of total US oil imports.
US to ban oil imports from Russia valued at less than $5bn(in 2021) just 3.5% of US oil imports. Interested to see if the ban will involve gasoline(petrol) imports from Russia which stand at 21% of US imports valued at over $12bn in 2021, highest of all countries exporting to US.
— Shubhangi Sharma (@ItsShubhangi) March 8, 2022
So, Russia isn’t dependent on oil exports to the US. US-Russia oil trade is significant, but it ain’t no game-changer. On the other hand, nickel is a gamechanger. It is an indispensable component used in making batteries for electric vehicles. Presently, 70 percent of global nickel supplies go towards the manufacturing of stainless steel. However, with the growth of the EV sector around the world, it is becoming an extremely tight sector.
Presently, Russia supplies around 6 percent of the world’s nickel, and therefore any growth in the demand for this metal helps the Russian economy in terms of its export revenue.
How much can the Russian economy gain through American EVs?
6% may not seem like a huge figure. However, when it comes to “Class 1” nickel, a high-quality form of the metal used in making EV batteries, Russia is second to none.
Russia’s MMC Norilsk Nickel PJSC operates mines in far northern Siberia that supply 17% of the world’s “Class 1” nickel. If the US pushes its EV sector to scrap gasoline cars, then Russian nickel would most probably be used in roughly every one of five EV batteries. Add to it the growing nickel prices. Following the Ukraine invasion, nickel prices have been surging sharply and Nickel prices have soared dramatically over the past few days. On Tuesday, the prices of the metal more than doubled and momentarily surpassed the $100,000 per tonne threshold.
As Biden keeps backing the EV industry to replace the fossil fuel-based vehicles, nickel prices will keep soaring. And the ultimate beneficiary will be Russia, the biggest adversary of the United States.