Russia threatens Europe with $300 oil and possible gas cuts

Western countries could face oil prices of more than $300 a barrel (more than double today’s) and the possible closure of the main gas pipeline between Russia and Germany if governments follow through on threats to cut oil supplies. energy that comes from Russia, as revealed on Monday by Alexander Novak, Russian Deputy Prime Minister.

Oil prices have already spiked to their highest levels since 2008 seriously threatening economic recovery after US Secretary of State Antony Blinken claimed Washington and European allies were considering banning oil imports. Russian.

“Catastrophic Consequences”

“It is absolutely clear that the rejection of Russian oil would have catastrophic consequences for the global market,” Russian Deputy Prime Minister Alexander Novak said in a statement on state television.

“The increase in prices would be unpredictable. It would be 300 dollars per barrelif not longer.” Novak forecast that it would take Europe more than a year to replace the volume of oil it receives from Russia and that it would have to pay significantly higher prices.

“European politicians must honestly warn their citizens and consumers what to expect,” says Novak. “If you want to turn down energy supplies from Russia, go ahead. We’re ready for that. We know where we could redirect volumes.”

Possible gas outages

Novak explains that Russia, which supplies 40% of Europe’s gas, was fulfilling its obligations in full, but that it would be within its rights to retaliate against the European Union after Germany froze the certification of the gas pipeline last month. Nord Stream 2.

“Regarding… the imposition of a ban on Nord Stream 2, we have every right to take an equivalent decision and impose an embargo on the pumping of gas through the Nord Stream 1 pipeline,” Novak threatened.

“Until now we are not making that decision… But European politicians with their statements and accusations against Russia are pushing us towards that,” says the Russian minister.

It is not the first threat of this type that comes from Russia. Dmitry Medvedev, former Russian president and prime minister, as well as a Gazprom official and a man of Vladimir Putin’s complete confidence (he chairs his party, United Russia), has ‘tweeted’ the following message: “German Chancellor Olaf Scholz has issued an order to stop the certification process of the Nord Stream 2 gas pipeline. Well, welcome to the new world in which Europeans They are going to pay 2,000 euros for 1,000 cubic meters of natural gas very soon!”

What is the Brussels plan?

The European Commission plans to present a package of measures to try to deal with the sharp increase in energy prices and the dependence on Russian gas. This axis revolves around Gas for winter plan with incentives and storage obligations for the countries.

Brussels plans to incorporate a legal requirement that imposes a minimum level of stocks before September 30 of each year, so that an incentive is generated to fill the storages. The International Energy Agency has also sent Europe its own plan (ten key ideas) to achieve this energy independence.

On the other hand, national governments will have the option of giving direct aid for the purchase of gas without a competitive process with the obligation to contribute it to the system during the winter, while countries that do not have storage will have to contribute to ensuring supply .

The European Commission will launch a pilot project for the joint purchase of gas and will continue to increase the diversity of countries from which it receives gas with the implementation of a coordination platform between the Member States and the operators.