Russia warns of $300 oil if ban goes ahead, threatens to cut off European gas
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Russia’s Deputy Prime minister Alexander Novak preside over an OPEC-Non-OPEC Ministerial Meeting via a video link up.
Alexei Maishev | Tass | Getty Images
Russia is threatening to cut off a key gas line to Germany. It also warned that $300 oil prices could be incurred if there was a West-wide ban on exports of its energy.
Russian Deputy Prime minister Alexander Novak declared Monday that it was clear that rejecting Russian oil would have catastrophic effects on the world market.
The price surge would not be predictable. The price would rise to $300 per barrel, if not greater.
Novak also quoted Germany’s decision last monthStop the certification of Nord Stream 2’s contentious gas pipeline.
Novak stated, “So far we have not taken such a decision.” We are pushed towards this by European politicians, who have made accusations about Russia and issued statements.
These comments are made as Russia is continuing its assault on Ukraine.
The U.N. saidSince Russia invaded Ukraine on February 24, 2017, 1.7 million people have fled Ukraine. The UN described it as the “fastest-growing refugee crisis since World War II”.
As a means of punishing Moscow, the U.S. is considering banning Russia’s exports of oil and natural gas.
The U.K., Germany and the Netherlands have all appeared to abandon a Western embargo of Russian energy exports.
Novak: “We are ready to it”
Novak stated that European politicians must be honest with their consumers and citizens about what they can expect.
If you don’t want energy from Russia, then go ahead. We’re ready to do it. Without providing any further details, he said that we know the best places to redirect volumes.
As energy market participants focused their attention on Russia’s possible sanctions, oil prices shot up to 14-year highs Monday.
International benchmark BrentOn Tuesday, crude oil futures traded at $127.04 per barrel. West Texas Intermediate futures jumped 2.5% to trade at $122.40.
Antony Blinken, the U.S. Secretary-of-State, told NBC Sunday that President Joe Biden was engaged in “very active conversations” with European leaders about banning Russian natural gas and crude oil imports.
The sanctions that the West has imposed upon Russia in response to the invasion were carefully designed to not directly affect Russia’s exports of energy. However, there is evidence the measures may be inadvertently leading traders and banks to abandon Russian crude oil.
Ukraine asked for Western allies’ support to place a “full embargo on Russian oil and gasoline,” although it is feared that this could cause global energy prices to soar.
German Chancellor Olaf Scholz, Monday’s opponent to calls for a ban on Russian oil and gaz, stated that this could pose a threat to Europe’s energy security and that Russia’s imports were critical to daily life.
Boris Johnson, U.K. Prime minister, said Monday that he was aligned himself with Scholz’s Germany and backed away from Russia’s plans for an oil embargo.
Johnson stated that it is impossible to stop oil and gas production overnight even from Russia. Johnson explained that it’s not possible for all countries to do this.
At the press conference, Mark Rutte (the Dutch Prime Minister) stated that Russia’s oil and gas imports must be reduced “step by step.”
Rutte stated, “We must make sure that we deleverage the dependence on Russian gas and on Russian oil while simultaneously acknowledging at this moment that the dependency remains to some extent.”
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