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The Kremlin warned Tuesday that oil prices will surge to unprecedented levels if US and European lawmakers proceed with a ban on Russian oil and gas imports in response to the invasion of Ukraine.
Russian Deputy Prime Minister Alexander Novak warned that global oil prices could hit $300 per barrel in the event of an import ban. The top Kremlin official also suggested Russia could shut down the Nord Stream 1 pipeline – a key supplier for Germany – in retaliation.
“It is absolutely clear that a rejection of Russian oil would lead to catastrophic consequences for the global market,” Novak said on state television. “The surge in prices would be unpredictable. It would be $300 per barrel if not more.”
West Texas Intermediate crude, the US price benchmark, was trading above $122 per barrel this week after Secretary of State Tony Blinken and other US officials said an import ban was under consideration. Prices have already increased to their highest level since 2008.
An import ban on Russian oil and gas would mark the latest attempt by Western nations to ratchet up pressure on the Kremlin as violence escalates in Ukraine. The Russian economy relies heavily on proceeds from its energy sector, with shipments comprising more than 40% of the country’s annual revenue.
Novak, a key deputy to Russian President Vladimir Putin, suggested it could take Europe more than a year to replace oil shipment volumes if Russia cut off access to its supplies.
“European politicians need to honestly warn their citizens and consumers what to expect,” Novak added.
“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.”
Analysts warn the price of oil could surge to $150 or beyond in the short term, depending on the severity of a potential import ban, The Post reported earlier this week.
The Ukraine conflict has led to further upheaval in a global energy market that was already struggling to keep pace with demand.
American motorists are paying record prices at the pump, with the nationwide average price of a gallon of gas reaching an all-time high of $4.17 as of Tuesday.
With Post wires
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