an embargo on Russian oil could cost a barrel of up to $300, warns Russia

While the United States is in talks with the European Union to ban Russian oil imports and Washington is prepared to act only in the event of refusal by European countries, many of which rely heavily on energy imports from Russia, Moscow has Monday warned of “catastrophic consequences for the world market” of the imposition of such an embargo. According to the Russian Deputy Prime Minister in charge of Energy, Alexander Novak, “the price increase is likely to be unpredictable and will reach more than $300 a barrel, or even more,” he said, quoted by Russian news agencies. †

For the latter, it is impossible to quickly replace supplies of Russian oil to the European market with that from an alternative source.

“It will take several years and it will be much more expensive for European consumers, who will be the biggest victims of such a scenario,” he warned.

The price of a barrel of Brent from the North Sea came close to $140 on Sunday around 23:00 GMT, close to the all-time high of July 2008 when it approached $150.

An oil price of $300 would push prices at the pump to more than $3 a liter for SP95. In Le Parisien, Francis Pousse, the president of fuel distributors (excluding supermarkets) at Mobillans, the trade union for distribution and car services, explains that “a rise in the dollar in the barrel leads to an increase of 0.7 to 1 cent at the pump “. With a barrel of 250 dollars (230 euros), the liter of SP95 would almost reach the bar of 3 euros (2.87 euros).

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Russian reprisals: freezing gas supplies

“Concerned” by the discussions surrounding an oil embargo, Russia could also retaliate against its gas supplies to Europe, of which nearly 40% of imports come from Russia (55% for Germany). While Germany last month suspended the certification process for the Nord Stream 2 gas pipeline to connect it to Russia, Moscow warned it could freeze supplies through Nord Stream 1. arrivals via the Nord Stream 1 gas pipeline,” explained Alexandre Novak. This gas pipeline carrying Russian gas to Europe is currently “100%” full.

“But we have not yet taken such a decision (…). Although European politicians force us to do so with their statements and accusations,” Alexander Novak emphasized.

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Discussion between Americans and Europeans

In the United States, US President Joe Biden, who is under intense political pressure to shut down this vital source of income to Russia, has “not made a decision at this stage” about a possible gas embargo and Russian oil, spokeswoman Jen Psaki said. Monday. Putting the differences between the United States and Europe into perspective, she indicated that the topic had been raised on Monday during a conversation between the US president and German, French and British leaders. Jen Psaki in particular insisted on “the very different conditions” for the Americans and the Europeans in terms of Russian hydrocarbons. Indeed, about 30% of Europe’s oil needs are supplied by Russia, compared to just 8% by the United States. Indeed, the White House is deeply concerned not to break more than necessary the near-perfect cohesion that the West has shown thus far in terms of economic sanctions against Russia.

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According to Washington, the United States, France, Germany and the United Kingdom are “determined to continue increasing the costs” imposed on Russia in response to the invasion of Ukraine, according to a White House press release. The French statement called on him “their determination to strengthen sanctions against Russia and Belarus”, while that of the British pledged “to continue to put pressure on Russia”. Only the press release published by Berlin does not address the issue of sanctions at all, highlighting mainly the “new possibilities of humanitarian aid to Ukraine”, which were also discussed. On Monday, Olaf Scholz said imports of fossil fuels from Russia were “essential” to the “daily lives of citizens” in Europe, and assured the continent’s supplies could not be otherwise guaranteed at this stage.

The EU wants to lift its dependence on Russia

However, European Union leaders will agree this week to phase out the union’s reliance on Russia’s gas, oil and coal imports, according to a draft statement seen by Reuters on Monday. Leaders of EU countries will meet on Thursday and Friday for a summit in Versailles to discuss strengthening the Union’s common defense capability and the possibility of Ukraine joining the EU.

They will also discuss ways to make the EU strategically independent from global suppliers in key sectors such as microchips, health and food.

“We have agreed to gradually reduce our dependence on imports of gas, oil and coal from Russia,” reads the leaders’ draft statement.

The EU will achieve this “in particular by diversifying its supplies and routes, including through the use of liquefied natural gas (LNG) and the development of biogas and hydrogen” and “through the development of renewable energy sources and the production of their key components as well as streamlining permitting procedures for energy projects,” the project says.

It also mentions improving the interconnection of Europe’s gas and electricity networks and the full synchronization of its electricity networks, as well as strengthening the EU’s contingency plans for security of supply.

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(with AFP and Reuters)