Russian Official Warns Oil Will Reach $300 if West Halts Purchases

Russian Deputy Prime Minister Alexander Novak warned that oil prices would spike to at least $300 per barrel should the West ban Russian oil.

In a Monday speech on state television, Novak said a ban would create "catastrophic consequences for the global market," CNBC reported.

The comments come just a week after Russia's invasion of Ukraine caused oil prices to surge above $100 a barrel. With Russia one of the world's top oil producers, countries around the world have been feeling the effects of the price increases.

In the United States, gas prices hit a record high on Tuesday, topping the previous record set in 2008, just before the recession and housing market collapse.

Novak also mentioned Germany's recent decision to stop the certification of the Nord Stream 2 gas pipeline, saying that Russia would have "every right to take a matching decision" by imposing an embargo on the Nord Stream 1 pipeline.

The Nord Stream 2 pipeline from Russia to Germany is complete, but Germany's final approval has been put on hold following Russia's actions in Ukraine. Russia's shelling on Ukrainian cities and villages is about to enter its third week.

The Swiss company behind the Nord Stream 2 pipeline had to file for bankruptcy and let its employees go due to the sanctions.

The Nord Stream 1 pipeline has been supplying Germany with gas since 2011, and has the capacity to supply the European Union (EU) with 55 billion cubic meters of gas a year for at least 50 years, according to its website. The majority of Germany's gas comes via Nord Stream 1, meaning that if use of the pipeline was halted, it would cause "a serious blow" to Germany's economy, Reuters reported.

Forty percent of the EU's gas comes via Russian pipelines, a few of which run through Ukraine, CNBC added.

In his speech, Novak said that so far, Russia will not be "taking such a decision" to close Nord 1 but added that "European politicians with their statements and accusations against Russia push us towards that."

He also said the leaders of Western nations should warn their citizens about the coming spike in energy prices.

"If you want to reject energy supplies from Russia, go ahead," he said. "We are ready for it. We know where we could redirect the volumes to," without specifying where.

Despite the record-breaking gas prices in the U.S., a poll conducted by Quinnipiac University found that 71 percent of U.S. adults would be in favor of a ban on Russian oil imports.

Update 3/8/22, 12:59 p.m. ET: This story was updated with additional information.

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Russian Deputy Prime Minister Alexander Novak warned that oil prices would spike to at least $300 per barrel should the West ban Russian oil. Stock Image/Getty Images