Kenya risks US sanctions if it buys Russian oil
Nairobi, Kenya – In a recent interview with the BBC, Kenya’s President William Ruto announced that his government was open to doing business with Russia.
Kenya‘s head of state said he was more than willing to buy Russian fuel after scrapping fuel subsidies, prompting a sharp rise in pump prices. He went on to say his goal is to ensure Kenyans have access to lower fuel prices.
“I will now move on to the agenda to ensure we have relationships between governments who will now gradually begin the journey to bring fuel prices down. East Africa would be a good option, but Kenya is who we are. The strategy we have is to make sure we work with market forces on how we can build a government-to-government relationship that fuels us to probably 20 to 25 Ksh per cent cheaper than what is on the market. ” said President Ruto.
Pressed by the question of whether he would keep an eye on Russian oil, Dr. Ruto added that his government has every opportunity to work with Vladimir Putin’s government for the benefit of Kenyans.
Russia became internationally isolated after invading Ukraine on February 24, 2022.
The President defended his decision to scrap fuel subsidies, arguing that it would drain state coffers.
“I had to scrap the subsidies because they put a huge drain on resources that would be used to develop the country and yet prices didn’t go down and generally distorted fuel prices in the country and created unnecessary shortages,” he said.
But should Kenya go ahead and do business with Russia, it will surely put the country at odds with the West, particularly the US government, which has imposed sanctions on Vladimir Putin’s government.
Earlier this month, Biden’s administration threatened sanctions against buyers of Russian oil.
According to the US Treasury Department’s Sept. 9, 2022 statement, individuals making “significant oil purchases above the price cap” and individuals providing false information about those purchases could be a target for sanctions enforcement action.
The warning is that the Joe Biden administration will closely monitor any African state that trades with Russia to become a target of sanctions.
The US Treasury Department’s guidance came after G7 finance ministers reached an agreement to set the price cap after months of discussions. The aim is to limit Russia’s earnings from the export of crude oil and refined products without triggering a global price hike.
The US and UK had persuaded other Western countries to remove Russian from the SWIFT system, a move that could force Kenya to use an alternative means of payment for Russian oil.
SWIFT (Society for Worldwide Interbank Financial Telecommunication) is the global financial artery that enables smooth and fast money transfers across borders.