Novak says oil may hit $300 a barrel if Russian crude shunned, TASS reports

March 21 (Reuters) – Russian Deputy Prime Minister Alexander Novak said on Monday that oil prices could reach $300 a barrel if Russian crude was shunned by the West, although he said that was unlikely, TASS news agency reported.

Novak also said it was impossible for Europe to refuse Russian oil and gas for now.

 The Kremlin said on Monday Europe would be hit hard in the event of an embargo on Russian oil, striking the continent’s energy balance, but would not affect the United States.

Some European Union foreign ministers are pushing for an oil embargo as part of a possible fifth round of sanctions against Russi, in an effort to punish Moscow over events in Ukraine. 

“Such an embargo would very seriously impact the global oil market, very badly impact energy balance on the European continent,” Kremlin spokesperson Dmitry Peskov told reporters on a daily conference call.

Diplomats have said a Russian chemical weapons attack in Ukraine, or a heavy bombardment of its capital Kyiv, could be a trigger for an energy embargo. Russia says it targets military, not civilian infrastructure.

Moscow itself has warned that EU sanctions on Russian oil could prompt it to close a gas pipeline to Europe. For now, the 27-nation EU, which relies on Russia for 40% of its gas, with Germany among the most dependent of the bloc’s large economies, is divided on how to tackle the energy issue.

“Americans would remain as they are and would feel much better than Europeans (in the event of oil embargo). This would be hard for Europeans – such a decision would hit everyone,” Peskov said.

Russia sent tens of thousands of troops into Ukraine on Feb. 24 in what it called a “special operation” to degrade its southern neighbour’s military capabilities and root out people it called dangerous nationalists.

Ukrainian forces have mounted stiff resistance and the West has imposed sweeping sanctions on Russia in an effort to force it to withdraw its forces.

Photo – Russian Deputy Prime Minister Alexander Novak . EPA-EFE/OLIVIER HOSLET