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- Already-surging oil prices could more than double in the coming months as Western countries threaten to ban Russian oil imports in response to the invasion of Ukraine.
- US Secretary of State Antony Blinken says the US and some European allies are considering a ban on oil imports from Russia, though Germany has opposed the idea
- Russian Deputy Prime Minister Alexander Novak warns a rejection of Russian oil could lead to oil prices upwards of US$300 per barrel given Russia’s position as the world’s second-biggest oil importer
- Mr Novak says it would take Europe more than a year to replace the volume of oil it received from Russia in the event Russia’s supply was cut off
- Today, Brent crude is at US$127 per barrel, while West Texas Intermediate sits at US$121.82 per barrel
Already-surging oil prices could more than double in the coming months as Western countries threaten to ban Russian oil imports in response to the invasion of Ukraine.
United States Secretary of State Antony Blinken said Washington and some European allies were considering a ban on oil imports from Russia even as heavy Western economic sanctions against Russia put immense pressure on its economy and local currency.
However, Russian Deputy Prime Minister Alexander Novak warned that a rejection of Russian oil would lead to “catastrophic” consequences for the global energy markets.
“The surge in prices would be unpredictable,” Mr Novak said.
“It would be US$300 per barrel, if not more.”
With Russia the second-largest exporter of oil on the planet, Mr Novak said it would take Europe more than a year to replace the volume of oil it received from Russia in the event Russia’s supply was cut off.
“European politicians need to honestly warn their citizens and consumers what to expect,” he 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 that Russia, which supplies 40 per cent of Europe’s gas, had “every right” to retaliate against economic sanctions by the European Union by imposing an embargo on gas pumping through the major Nord Stream 1 pipeline.
“So far, we are not taking such a decision, but European politicians, with their statements and accusations against Russia, push us towards that,” he said.
Oil prices have skyrocketed over recent months to levels not seen since 2008 as the threat of Russia’s military action in Europe threatened supply and put investors on tenterhooks.
Today, Brent crude is at US$127 (A$173) per barrel, while West Texas Intermediate sits at US$121.82 (A$166) per barrel.
The crude oil benchmarks have come down from their Monday peak of around US$130 (A$177.50) per barrel after Germany pushed back against the ban on Russian energy imports.
German chancellor Olaf Scholz said such a move could put Europe’s energy security at risk given there was no suitable replacement for Russia’s oil supply in the near term.
Nevertheless, the threat of surging energy prices remains given the US could be willing to move ahead with the ban on Russian oil imports alone, according to Reuters.
Russia’s invasion of Ukraine has created 1.7 million refugees, a string of sanctions against Moscow, and fears of wider military conflict in Europe to a degree not seen since World War II.
