War in Ukraine: Russia says it could cut gas supplies if oil ban continues
Written byTimes Magazine
Russia has announced it will close its main gas pipeline to Germany if the West continues to ban Russian oil. Deputy Prime Minister Alexander Novak said that "the rejection of Russian oil would have disastrous consequences for world markets," which would cause the price to double to $300 per barrel.
The United States is exploring a possible ban on punishing Russia for invading Ukraine with allies. But Germany and the Netherlands rejected the plan on Monday. The EU gets about 40% of its gas and 30% of its oil from Russia, and there is no easy substitute if supplies are interrupted.
Novak said it was "impossible to immediately find a substitute for Russian oil on the European market" in a statement on Russian state television. "This will take years and be much more expensive for European consumers. In the end, this outcome will cost them the most," he said.
Citing Germany's decision last month to freeze the certification of Nord Stream 2, a new pipeline linking the two countries, he added that the oil embargo could trigger retaliation. "We have the right to make the right decision and impose an embargo on pumping gas through the [existing] Nord Stream 1 pipeline," he said.
Russia is the world's largest producer of natural gas and the second-largest producer of crude oil. Any attempt to sanction its energy industry would seriously damage its economy. It also provides the world with about 10% of its nickel needs, mainly in stainless steel batteries and electric vehicles.
Nickel costs on the London Metal Exchange more than doubled on Tuesday, topping $100,000 a tonne for the first time. Ukraine is begging the West to impose an oil and gas ban but fears this will lead to higher prices. Investor fears of a temporary embargo pushed Brent crude to $139 (106 pounds) a barrel on Monday - its highest in nearly 14 years.
The average price of gasoline in the UK also hit a new record at 155 pence per liter. However, the rise in Brent crude - the world's benchmark for oil - was muted on Tuesday, with the price per barrel up 3% to $121.
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