Just when we thought the oil situation couldn’t get any worse, Russia has just threatened to close a major gas pipeline to Germany. As a result, the closure of said pipeline may cause global oil prices to skyrocket to $300 per barrel.
“It is absolutely clear that a rejection of Russian oil would lead to catastrophic consequences for the global market,” Russian Deputy Prime Minister Alexander Novak said Monday in an address on state television. Novak further added that, “The surge in prices would be unpredictable. It would be $300 per barrel if not more.”
Novak also mentioned Germany’s decision to to halt the certification of the highly contentious Nord Stream 2 pipeline, saying “We have every right to take a matching decision and impose an embargo on gas pumping through the Nord Stream 1 gas pipeline.”
He was quick to point out as well that they haven’t made any decisions yet, however, certain comments and decisions by other European leaders may push them to do just that.
Energy analysts have warned that any ban on Russia’s oil could have severe repercussions for energy markets and the world economy. This is because Russia is the third largest oil producer just behind Saudi Arabia and the United States of America.
Locally, we are already feeling the effects of the current crisis, this latest development while not yet a reality, may soon become one.