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Another day, another flashing red headline that the White House is considering a ban on Russian oil imports – something it has repeatedly said earlier this week – although it has yet to make a decision:

• *WHITE HOUSE CONSIDERING BAN ON RUSSIAN OIL IMPORTS
• *WHITE HOUSE SPOKESPERSON SAID NO DECISION HAS BEEN MADE

The news sent WTI spiking as high as $114.64.

The Biden administration also said it was looking at options they can take right now if they decide to cut the U.S. intake of Russian energy, say Cecilia Rouse, chair of the White House Council of Economic Advisers.

“We are considering a range of options but what’s really essential is that we maintain a steady supply of global energy,” Rouse says at briefing, adding the U.S. does not import a lot of Russian oil (but it does import enough for it to be meaningful).

While even Psaki admitted that such a move would send gas prices sharply higher, perhaps Biden is feeling emboldened by the latest reports out of Vienna on the fate of the Iran nuclear deal, where Russia’s chief negotiator in talks to revive a 2015 nuclear deal between world powers and Iran said on Friday that he thought a deal was possible in the middle of next week.

“As far as I know, the Iranians are not ready for direct talks (with the United States),” Mikhail Ulyanov told reporters. “We will have a deal maybe in the middle of next week. We are talking about the last efforts before crossing the finish line.”

The specter of an Iranian deal, which would lead to a one time boost of as much as 100mm/b as seaborne crude enters the market, and an incremental several hundred thousand bbls/month, had helped contain oil prices somewhat, although the fact that Russia is negotiating for an outcome which Biden is desperately hoping to achieve should probably make those who still have some grasp of the bigger geopolitical picture, nervous (we will have more to say about this later).

Meanwhile, those wondering what a full-blown US ban on Russian imports would do to oil prices, read today’s FT interview of Pioneer Resources CEO Scott Sheffield, who said oil would “easily” go to $150-$200 a barrel if the Western world bans Russian oil and gas.

“The only way to stop Putin is to ban oil and gas exports,” the CEO of the largest US shale company told the Financial Times in an interview on Friday. “[But] if the western world announced that we’re going to ban Russian oil and gas, oil is going to go to $200 a barrel, probably — $150 to $200 easy.” This confirms what we said yesterday in “Two Oil Price Scenarios: One Bad, And One Catastrophic.“

Sheffield also said that the US would be unable to replace crude supplies from Russia this year, even as he backed calls for a global embargo on its energy exports.

“I’m talking about a two- to three-year plan. Because US shale, even if somebody adds a [drilling] rig . . . it takes six to eight months to get first production. There’s labor shortages, there’s frack fleet shortages, there’s rig shortages, there’s sand shortages.”

Russia exported about 5mn barrels a day of crude oil before it invaded Ukraine last month. While China might still absorb some of that volume in the case of a western embargo, there would still be a significant supply shortfall.

“We need to add probably two, two and a half million barrels a day,” Sheffield said. But he warned that an accelerated drilling campaign would require investors’ blessing. “We’d have to go to our shareholder base and ask what their thoughts are,” he said, hinting strongly that it is Biden’s own “green deal” lunacy that is the reason why the US lost its hard won energy independence that was perhaps the high point of the Trump administration.

Of course, if oil does hit $200, we are looking at a global depression, similar to the global financial crisis of 2008 when oil hit $140 just before it crashed to $30 as the inflationary tsunami became a deflationary shockwave almost overnight.