Moscow warns of $500-a-barrel oil

Oil prices will jump to $300 a barrel if the West abandons Russian oil, the country’s Deputy Prime Minister and former energy minister Alexander Novak said on Monday, adding that “some see it possibly reaching $500 a barrel.”

The warning comes as the EU plans to discuss placing an embargo on Russian crude as part of its fifth set of sanctions aimed at putting more pressure on Moscow to stop its military operation in Ukraine.

Novak added that if Western consumers stop buying Russian crude, the country will diversify its supplies and will find buyers elsewhere.

Oil prices have risen by nearly $4 a barrel on Monday, with global benchmark Brent exceeding $112 by midday GMT, on expectations that the European Union might join the United States in banning imports of Russian crude.

Dutch Prime Minister Mark Rutte, meanwhile, has called such an embargo “unrealistic,” pointing out that EU countries still heavily depend on Russian oil and gas and cannot simply cut themselves off on short notice.

“Too many refineries in the eastern and western part of Europe still completely depend on Russian oil and with gas it’s even worse,” Reuters quoted Rutte on Monday as having said, ahead of the expected debate by EU foreign and defense ministers in Brussels.

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