Russia retaliated by threatening to close a major gas pipeline to Germany. Russian Deputy Prime Minister Alexander Novak said in a state television address that rejection of Russian oil would lead to catastrophic consequences for the global market and claims that the price of oil could rise to over $300 a barrel.
Citing Germany's decision to halt the certification of Nord Stream 2, Novak noted that Russia has every right to make a matching decision and impose an embargo on gas pumping through the Nord Stream 1 gas pipeline.
"So far, we are not taking such a decision. But European politicians with their statements and accusations against Russia push us towards that," Novak warned.
He also said it would be impossible to quickly find a replacement for Russian oil in the European market. "It will take years, and it will still be much more expensive for European consumers. Ultimately, they will be hurt the worst by this outcome."
Bank of America analysts have said that prices could reach up to $200 a barrel if Russia's exports were cut off, and oil prices hit near a 14-year high on Tuesday, March 8, with Brent crude futures already reaching as high as $125.19 per barrel. (Related: Rising gas prices to hit $7 a gallon if crude oil cost spikes and tension between Russia and Ukraine escalates.)
Novak's threat about the Nord Stream 1 gas pipeline to Germany follows the comments made by the European Commission's climate policy chief, who said that the EU could wean itself off Russian gas within years and start curbing its reliance on the giant within months.
"It's not easy, but it's feasible," Frans Timmermans said during the European parliament's environment committee.
Russia's invasion of Ukraine has triggered many concerns, with the European Commission set to propose plans to diversify the continent's fossil fuel supplies away from Russia and move forward to renewable energy.
Stateside, President Joe Biden held a video conference call with European leaders, pushing for their support in banning Russian oil imports. However, the U.S. said it is willing to move ahead without its European allies.
U.S. Secretary of State Anthony Blinken revealed that the idea of withdrawing support on Russian oil was gaining traction in the White House and had been the subject of active discussion. In the U.K., PM Boris Johnson attracted criticism after saying that the U.K. may have to increase its own domestic gas and oil production.
Ban could have seismic repercussions for world economy
Russia is the world's third-largest oil producer behind the U.S. and Saudi Arabia. It is also the world's largest exporter of crude to global markets and a major producer and exporter of natural gas.
The European Union receives around 40 percent of its gas via Russian pipelines, some of which run through Ukraine. (Related: Sen. Cotton says gas prices will continue to rise, calls for deregulation of energy production in US.)
With the ban on Russia's oil and gas, energy analysts warn that this could have seismic repercussions for energy markets and the world economy as a whole.
European policymakers are now under immense pressure to end their dependence on Russian fossil fuels, particularly as energy-importing countries continue to refill Putin's war chest with oil and gas revenue daily.
The revenue from Russian oil and gas was seen to be responsible for up to 43 percent of the Kremlin's federal budget between 2011 and 2020, highlighting how fossil fuels play a central role in the Russian government.
Novak also said European politicians need to honestly warn their citizens and consumers what to expect, adding that Russia is ready for them to reject energy supplies. "We know where we could redirect the volumes to," he added.
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Financial pressures rise worldwide as governments witness the unfolding of the Russia-Ukraine crisis.
Watch the video below of TFI Global host Vedica Singh talking about Iran, Venezuela and other countries backing Russia through an embargo on oil exports.
This video is from the Jerusalem Cats channel on Brighteon.com.
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