U.S. President Joe Biden announces the release of 1 million barrels of oil per day for the next six months from the U.S. Strategic Petroleum Reserve, as part of administration efforts to lower gasoline prices, during remarks in the Eisenhower Executive Of
U.S. President Joe Biden announces the release of 1 million barrels of oil per day for the next six months from the U.S. Strategic Petroleum Reserve, as part of administration efforts to lower gasoline prices, during remarks in the Eisenhower Executive Office Building’s South Court Auditorium at the White House in Washington, U. Reuters / KEVIN LAMARQUE

The Biden administration may soon consider calls for exemptions to a ban on financing of new carbon-intensive fossil fuel projects overseas, a senior U.S. official said, as energy markets tighten on Russia's invasion of Ukraine.

President Joe Biden in December ordered U.S. agencies to immediately stop financing coal, gas and other projects and prioritize global collaborations to deploy clean energy technology.

The order provided exemptions if a country faced severe consequences if it was unable to build a plant burning fossil fuels, such as natural gas or coal.

A senior U.S. official told reporters on condition of anonymity he suspected that over the coming months there will be situations where some officials will want to invoke the provision. The official, who did not want to be directly quoted, said there would be an interagency process on the merits of any exceptions.

Any expemptions to the order could underscore how Russia's invasion has forced the Biden administration to balance priorities on tackling climate change with energy security, including by imploring domestic oil producers to boost production and to open up the Strategic Petroleum Reserve.

The invasion of Ukraine by Russia, which typically provides about 40% of the European Union's natural gas and about 27% of its oil, has intensified the global energy crunch. The EU is seeking to wean itself off the imports, and traders worry Russia could use energy as a weapon by restricting shipments to global markets.

The official said that if the United States was to ultimately help fund any new fossil fuel projects overseas the country would have to show it is on a path to reducing the overall emissions of its economy.