Russia warns of cutting Europe's gas supplies if oil ban continues
Russia has warned against cutting gas supplies to Europe following the US sanctions pushing the European allies to consider banning oil imports from Russia over its ongoing conflict with Ukraine.
Share It :
Russian deputy prime minister Alexander Novak said on Tuesday that any move to ban the country’s gas supplies would result in oil prices more than doubling to about $300 per barrel.
“A rejection of Russian oil would lead to catastrophic consequences for the global market, ” he said.
Citing Germany’s decision last month to halt the certification of Nord Stream 2, Novak said Moscow had “every right to take a matching decision and impose an embargo on gas pumping through the Nord Stream 1 gas pipeline.”
He said that “it will take years” for Europe to find a replacement for Russian oil. “European politicians need to honestly warn their citizens and consumers what to expect,” he added.
Two weeks ago, Russian President Vladimir Putin ordered a military campaign in Ukraine over concerns about NATO’s military activities close to its borders.
The war has already sent oil prices to their highest levels since 2008 on Tuesday, with Brent crude futures reaching as high as $125.19 a barrel.
Analysts at Bank of America have also said prices could reach $200 a barrel if most of Russia’s exports were cut off.
Despite the West’s heavy sanctions on Russia, Europe has so far been cautious about extending the sanctions regime to oil and gas, due to its vulnerability to a loss of energy supplies. Russia supplies about 40% of Europe’s gas.
The US-based Shell oil company announced on Tuesday it was withdrawing from its involvement in all Russian hydrocarbon trade.
“As an immediate first step, the company will stop all spot purchases of Russian crude oil. It will also shut its service stations, aviation fuels and lubricants operations in Russia,” it said in a statement.
The major oil firm also apologized for buying 100,000 metric tons of flagship Urals crude for Russia at a record discount on Friday. The purchase prompted heavy criticism against the company, although it did not violate any Western sanctions. The firm vowed to commit the profits from the discounted Russian oil to a fund dedicated to humanitarian aid for Ukraine.
In the wake of the purchase, Ukraine’s Foreign Minister Dmytro Kuleba urged companies to cut all business ties with Russia.
Shell has said previously that it intends to exit its joint ventures with Russian gas giant Gazprom and its related entities.
