European natural gas prices surged Tuesday after Russia threatened the possible closure of the Nord Stream 1 (NS1) pipeline if Western countries decide to ban Russian oil.
Deputy Prime Minister Alexander Novak said Russia could halt NS1 flows to Germany if European countries and the US go ahead and ban Russian energy products.
"In connection with unfounded accusations against Russia regarding the energy crisis in Europe and the imposition of a ban on Nord Stream 2, we have every right to take a matching decision and impose an embargo on gas pumping through thee added: "But so far, we are not taking such a decision."
European natgas futures, Dutch gas, surged as much as 32% to around 295 euros a megawatt-hour, about 40 euros below yesterday's historic higher of 335. Prices have since faded intraday to around 200 euros. Gas prices have more than tripped on an intraday basis within the last two weeks following the Russian invasion and Western countries. Nord Stream 1 gas pipeline," Novak said.
Novak said a ban on Russian oil "would lead to catastrophic consequences for the global market." He said the surge in crude "prices would be unpredictable. It would be $300 per barrel if not more."
The comments come after U.S. Secretary of State Antony Blinken told NBC this past weekend that the Biden administration is in "very active discussions" with European leaders to restrict Russian oil imports.
Meanwhile, German Chancellor Olaf Scholz said Monday that Russian oil and gas are "essential importance" to the European economy. Europe receives one-third of its natgas from Russia, but the dependence varies per country.
Novak said that Russia has other options (China) for selling energy products if Western countries ban Russian oil.