Russia Warns Crude Oil Prices Could Jump To $300/Barrel If West Bans Oil Imports

New Delhi: Moscow has warned that the price of crude oil could soar to a staggering $300 a barrel in the event of a ban on Russian oil imports by Western countries and could prompt the closure of the main gas pipeline to Germany.

Russian Deputy Prime Minister Alexander Novak has said that a rejection of Russian oil would lead to catastrophic consequences for the global market, adding that the price could more than double to over $300 per barrel.

The US said that Washington and its European allies were considering halting Russian oil imports in a bid to pressurize Russian President Vladimir Putin.

Strict sanctions were slapped against Russia because of its aggression in Ukraine and this led to the price of crude oil skyrocketing and it spiked to its highest levels since 2008. 

Brent rose $5.1, or 4.3%, to settle at $123.21 a barrel while U.S. West Texas Intermediate (WTI) rose $3.72, or 3.2%, to settle at $119.40 a barrel. 

The certification of Nord Stream 2 was frozen by Germany last month due to the Russian invasion of Ukraine. Nord Stream 2, a gas pipeline directly running from Russia to Germany via the Baltic sea, was supposed to supply Russian gas to Germany. 

In response, the Russian Deputy Prime Minister said that Moscow has every right to take a matching decision and impose an embargo on gas pumping through the Nord Stream 1 gas pipeline.

It is worth noting that Europe is heavily reliant on Russian energy and imports nearly 40 per cent of its energy from Russia.

Russia happens to be a major player in the global energy market. It is the world's top exporter of crude and oil products combined, with exports of around 7 million barrels per day, or 7 per cent of global supply. 

"The bigger picture is that supply disruptions are getting worse," said Andrew Lipow, president of Lipow Oil Associates in Houston. "Nobody wants to touch anything related to Russia."

"We consider $125 per barrel, our near-term forecast for Brent crude oil, as a soft cap for prices, although prices could even rise higher should disruptions worsen or continue for a longer period," UBS commodity analyst Giovanni Staunovo said.

Analysts at Bank of America said if most of Russia's oil exports were cut off, there could be a shortfall of 5 million barrels per day or even larger than that, pushing prices as high as $200.

Also read: Petrol, Diesel Prices To Shoot Up By Rs 15 Per Litre: Reports

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