Western countries are facing a grim outlook of oil prices at $300 per barrel. This can happen once governments follow through on cutting off oil from Russia. Once the West decides to cut off Russia from the list of the world’s energy suppliers, expect supplies to shrink as demand remains high.
Boycotting Russian Oil Can Lead to Prices of $300 per Barrel
As Russia continues its war against Ukraine, Western countries are now considering banning Russian oil from international trade.
US Secretary of State Anthony Blinken is meeting with European officials to come up with a plan. The group wants to sanction Russia by cutting off its oil exports.
At the same time, they want to ensure that the world’s oil supplies remain steady. Whatever happens, nobody wants to see oil prices shoot up to $300 per barrel.
As a result, oil prices spiked to their highest levels since 2008. Brent crude briefly hit $139 before settling down to below $130 levels.
In addition, West Texas Intermediate crude hit $130 per dollar before closing at $125. As the war continues, oil supplies remain tight, leading to more price increases. Already, Americans are bracing for gas prices in the US to hit $4.50 per gallon.
Russian Warns of $300 Per Barrel Oil Prices If Sanctions Tighten
Meanwhile, Russia continues to warn the West of $300 per barrel oil prices if they insist on sanctioning the country further.
Russian Deputy Prime Minister Alexander Novak made a speech on state television. “It is absolutely clear that a rejection of Russian oil would lead to catastrophic consequences for the global market. The surge in prices would be unpredictable. It would be $300 per barrel if not more.”
In addition, Novak said Europe will need more than a year to replace the volume of oil it Russia provides. As a result, countries will have to pay much higher prices.
“European politicians need to honestly warn their citizens and consumers what to expect,” Novak said. “If you want to reject energy supplies from Russia, go ahead. We are ready for it. We know where we could redirect the volumes to.”
Russia Supplies 40% of Europe’s Gas
Russia is the world’s second largest producer of oil next to Saudi Arabia. It is also the world’s largest exporter of natural gas. In fact, Russia supplies 40% of Europe’s gas.
Novak also said that Russia will continue to fulfill its obligations to its customers. However, it will be within its rights to retaliate against the European Union if sanctions will continue or escalate.
In particular, Russia is smarting over Germany’s decision to halt certification of the Nord Stream 2 pipeline. Novak said Russia will consider imposing an embargo on gas pumping through Nord Stream 1.
“So far we are not taking such a decision,” he said. “But European politicians with their statements and accusations against Russia push us towards that.”
Watch the PBS Newshour video reporting on how high could gas prices go as sanctions ratchet up on Russia?
Do you think that oil prices will really reach $300 per barrel in the near future? What can the West do to prevent this from happening?
Tell us what you think. Share your thoughts in the comments section below.
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