Russia has threatened to cut off natural gas supplies to Europe through the Nord Stream 1 pipeline as part of its response to sanctions imposed for invading Ukraine , a move that could intensify turbulence in energy markets and further increase consumer prices.
Russia has the right to take measures that “mirror” the sanctions imposed on the Russian economy, Deputy Prime Minister Alexander Novak, who is also in charge of energy affairs, said in a televised address Monday night. He indicated that a decision to close Nord Stream 1 has not yet been made, and that the pipeline is currently operating “at full capacity.”
The comments come after a day of wild gyrations in European gas markets , with prices at one point rising nearly 80% amid fears of a supply disruption from Russia.
Europe’s dependence on Russian energy has been a key factor in efforts by the continent’s leaders to agree on how to respond to the invasion of Ukraine. Last month, Berlin shelved the $11 billion Nord Stream 2 pipeline project, and European Union officials say they are working on a plan that could cut the bloc’s import needs from Russia by almost 80% this year.
But many EU politicians remain wary of any immediate action, one reason Germany has rejected proposals to ban oil imports. German Chancellor Olaf Scholz said on Monday that Russian oil and gas are of “essential importance” for the European economy. About 40% of the EU’s gas imports and a quarter of its oil come from Russia.
Novak said Russia has other options to sell its oil if the United States and the EU ban Russian imports, warning that any such move could have “catastrophic consequences for the world market” with prices rising to $300 a barrel. or more.