By John Ikani
Russia has threatened to close a major gas pipeline to Germany and warned of $300 oil prices if the West goes ahead with a ban on its energy (oil and Gas) exports.
Russia has the right to take actions that “mirror” the penalties imposed on the Russian economy, Deputy Prime Minister Alexander Novak — who’s also in charge of energy affairs — said in a televised speech late Monday.
According to him: “It is absolutely clear that a rejection of Russian oil would lead to catastrophic consequences for the global market.
“The surge in prices would be unpredictable. It would be $300 per barrel if not more.”
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 comments come after a day of wild swings on European gas markets, with prices at one point surging by almost 80% amid fear of disruption to supplies from Russia.
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, however.
Europe’s reliance on Russian energy has been a key factor in efforts by the continent’s leaders to agree on how to respond to the invasion of Ukraine. Last month, Berlin shelved the $11 billion Nord Stream 2 pipeline project, and European Union officials say they’re working on a plan that could cut the bloc’s import needs from Russia by almost 80% this year.
But many EU politicians remain wary of immediate action, one reason why Germany has pushed back against proposals for a ban on oil imports. German Chancellor Olaf Scholz said Monday that Russian oil and gas are of “essential importance” to the European economy. Roughly 40% of EU gas imports and one quarter of its oil come from Russia.
Novak said that Russia has other options for selling its oil if the U.S. and EU ban Russian imports, and he warned that any such move could have “catastrophic consequences for the world market” with prices surging to $300 a barrel or more.
Meanwhile, Russia has continued its onslaught of Ukraine well into its second week, with the already dire humanitarian crisis expected to worsen as the Kremlin continues its invasion.
The U.N. has said 1.7 million refugees have left Ukraine since Russia’s invasion of the country began on Feb. 24, describing it as “the fastest-growing refugee crisis in Europe since World War II.”