Russia has threatened to close a major gas pipeline to Germany and warned that Western countries could face oil prices of over $300 per barrel if the West goes ahead with a ban on its energy exports, CNBC reports.
“It is absolutely clear that a rejection of Russian oil would lead to catastrophic consequences for the global market,” Russian Deputy Prime Minister Alexander Novak said Monday in an address on state television.
“The surge in prices would be unpredictable. It would be $300 per barrel if not more,” added Novak.
Novak also cited Germany’s decision last month to halt the certification of the highly contentious Nord Stream 2 gas pipeline, saying: “We have every right to take a matching decision and impose an embargo on gas pumping through the Nord Stream 1 gas pipeline.”
“So far, we are not taking such a decision,” Novak said. “But European politicians with their statements and accusations against Russia push us towards that.”
The U.S. has been considering whether to impose a ban on Russia’s oil and gas exports as a way of punishing Moscow. Germany, the Netherlands and the U.K. have appeared to back away from a coordinated Western embargo on Russian energy exports.
The European Union receives around 40% of its gas via Russian pipelines, several of which run through Ukraine.
“European politicians need to honestly warn their citizens and consumers what to expect,” Novak said. “If you want to reject energy supplies from Russia, go ahead. We are ready for it. We know where we could redirect the volumes to,” he added, without providing further details.
Oil prices soared to 14-year highs on Monday, as energy market participants focused on the prospect of full sanctions on Russia’s energy exports.
International benchmark Brent crude futures rose 2.1% to trade at $125.75 a barrel on Tuesday morning in London.
Ukraine Foreign Minister Dmytro Kuleba has called on Western allies to impose a “full embargo” on Russian oil and gas, saying via Twitter that “buying them now means paying for the murder of Ukrainian men, women and children.”
U.S. Secretary of State Antony Blinken told NBC on Sunday that President Joe Biden’s administration was in “very active discussions” with European governments about banning imports of Russian crude and natural gas.
The European Union on Tuesday is set to outline a raft of measures designed to reduce the bloc’s reliance on Russian gas.