If the Russian oil ban continues, Russia will cut gas supplies. Russia said it might close its main gas pipeline to Germany. This will happen if the West goes ahead with a ban on Russian oil.
Alexander Novak, Deputy Prime Minister, stated that rejection of Russian oil would result in destructive consequences.
This will damage the global market. The prices will get more than double to $300 a barrel. Meanwhile, the US is exploring ways to punish Russia for its Ukrainian invasion. But Germany and Netherlands rejected the plan.
EU receives 40% of its gas and 30% of its oil from Russia. Also, they have no alternative if supplies disrupt. On the other hand, the UK will not get affected. It imports less than 5% of its gas from Russia.
Though it will suffer because of increasing prices in the global markets. Iain Conn, the former boss of British Gas owner Centrica, said that it would become difficult to replace Russian gas. Since the transportation for fixed through pipelines from country to country.
Mr. Novak said that it is impossible to quickly find a replacement for Russian oil. It will take years and is much more expensive for consumers. This will become the worst hurt by this outcome.
He said, “We have every right to take a matching decision and impose an embargo on gas pumping through the [existing] Nord Stream 1 gas pipeline.”
Russia is the world’s second-largest gas producer and third-largest oil exporter. Any step to impose sanctions on its energy industry will damage its economy.
Nathan Piper is the head of oil and gas research at Investec. He mentioned Russia’s oil and gas exports as challenging. He also said that global oil and gas markets are tight. This has limited potential to replace disrupted Russian volumes.
Analysts at Capital Economics predicted that oil prices would rise to $160 a barrel. But David Oxley, senior global economist at the consultancy, told BBC that disruption to Russian gas would hit countries harder.
He said energy-intensive industries across Europe would get hit. EU countries heavily reliant on Russian gas may switch from gas to coal. He said, but that would work against the bloc’s climate ambitions.