Words by Anurag Venugopalan, Staff Writer
Russia has threatened to shut down a major gas pipeline to Europe if the West goes ahead with its ban on energy imports which could eventually lead to $300 oil prices.
Russian Deputy Prime Minister, Alexander Novak, had stated on state television that “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.”
This comes after last month’s decision by Germany to halt the certification Nord Stream 2, a 1,200kms pipeline under the Baltic sea, which is going to serve as a secondary pipeline to take gas from the Russian Coast to Lubmin in Germany. “We have every right to take a matching decision and impose an embargo on gas pumping through the Nord Stream 1 gas pipeline.”
“It will take years, and it will still be much more expensive for European consumers. Ultimately, they will be hurt the worst by this outcome,” he said, claiming that it will take a long time to come up with a replacement for Russian oil in Europe.
The statement comes as Russia’s onslaught on Ukraine continues well into the second week with the humanitarian crisis expected to worsen as Moscow continues its invasion.
Analysts of Bank of America have stated that the prices could become $200 a barrel if Russian exports were cut off as the prices have already hit 14-year highs of $125.19.
The European Commission will propose plans to diversify Europe’s fuel supplies away from Russia and turn to more sources of renewable energy.
U.S. President, Joe Biden, held a video conference call on Monday with the leaders of Britain, France and Germany as he pushed for support to ban Russian oil imports.
The US is willing to go ahead with the ban without its European counterparts while Germany, the Netherlands and Britain have appeared to back away from a coordinated Western ban on Russian energy imports.
However, it should be noted that Russia is the world’s third largest producer of oil, following the U.S and Saudi Arabia, and the world’s largest crude exporter to global markets. It is also a major producer and exporter of natural gas while the European Union receives around 40% of its gas via Russian pipelines, many 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.
Immense pressure is on European policymakers as they try to curb their dependence on Russian imports, as revenue from Russian gas and oil was seen to be responsible for 43% of the Kremlin’s federal budget between 2011 and 2020.
Ukraine’s Foreign Minister Dmytro Kuleba has called on Western Allies to impose a “full embargo” on Russian oil and gas while stating via Twitter that “buying them now means paying for the murder of Ukrainian men, women and children.”
The UN refugee agency UNHCR said 2,011,312 people have fled since Russia launched its brutal assault on Ukraine on the 24th February, with Poland hosting around 1.3 million Ukrainian refugees.
Editor’s note: information correct at time of writing