A Kremlin official is threatening to cut gas supplies to Europe and warns that oil prices could top $300 a barrel if Russian oil is banned.
A senior Russian official warned that a Western ban on Russian oil imports could more than double oil prices to around $300 a barrel and shut down the main gas pipeline from Russia to Germany.
In a statement on state television on Monday, Russian Deputy Prime Minister Alexander Novak said it was “absolutely clear that ditching Russian oil would have catastrophic consequences for the global market.”
“Rise in prices will be unpredictable,” he said. “It will be $300 per barrel, if not more.”
The warning came as the United States, seeking to increase pressure on Moscow over its invasion of Ukraine, said Washington and its European allies were considering a ban on Russian oil imports.
The White House said US President Joe Biden, who is facing growing calls from US lawmakers to cut Russia off from the money it receives from oil and natural gas exports, discussed the issue during a conference call with his counterparts in France, Germany and the US. Kingdom on Monday.
But Biden hasn’t made a decision “at the moment,” the spokesman said.
Western countries hit Moscow with a wall of sanctions after its attack on Ukraine, and Washington imposed sanctions on technology exports to Russian refineries and Nord Stream 2, which was supposed to supply gas from Russia to Germany.
Berlin, which is heavily dependent on Russian crude oil, has also frozen the certification of this pipeline.
But German Chancellor Olaf Scholz earlier Monday warned against a ban on Russian oil and gas, saying Russian energy imports were “necessary” for Europeans’ daily lives.
“We are ready for it”
Russia supplies 40 percent of gas to Europe.
It is also the world’s largest exporter of crude oil and refined products combined, at about 7 million barrels per day, or about 7 percent of the world’s supply.
Novak, Russia’s deputy prime minister, said that if Europe were to ban Russian oil and gas, it would take more than a year for countries on the continent to make up for the oil they get from Russia, and they would have to pay significantly higher prices.
“European politicians must give their citizens and consumers fair warning of what to expect,” Novak said.
“If you want to refuse the supply of energy resources from Russia, please. We are ready for it. We know where we could redirect the volumes.”
Novak said that Russia is fully fulfilling its obligations, but it has every right to retaliate against the European Union after Germany froze the certification of Nord Stream 2.
“In connection with… the imposition of a ban on Nord Stream 2, we have every right to take the appropriate decision and impose an embargo on gas transportation through the Nord Stream 1 gas pipeline,” Novak said.
“So far we have not made such a decision,” he said. “But European politicians are pushing us towards this with their statements and accusations against Russia.”
The turmoil has already pushed oil prices to their highest levels since 2008.
U.S. benchmark oil rose to $130 a barrel overnight early on Monday before falling back to about $119, up 3%, in the afternoon. The world price soared to $139 before dropping to about $123 a barrel.
Just a month ago, before the Russian invasion of Ukraine, the US Department of Energy predicted that oil would average around $80 a barrel this year.