Russia threatens to cut gas flows to Europe
Moscow warns West of $300 per barrel oil
— Fears of an energy war between Russia and the West grew on Tuesday after the United States pushed its allies to ban Russian oil imports as punishment for Moscow’s invasion of Ukraine, where talks on humanitarian corridors made little progress.
Russia warned it could stop the flow of gas through pipelines from Russia to Germany in response to Berlin’s decision last month to halt the opening of the controversial new Nord Stream 2 pipeline. Russia supplies 40 percent of Europe’s gas.
“We have every right to take a matching decision and impose an embargo on gas pumping through the Nord Stream 1 gas pipeline,” Russian Deputy Prime Minister Alexander Novak said on Monday.
Novak also warned that oil prices could more than double to $300 a barrel if the United States and its allies banned imports of Russian oil, a crucial source of revenue after the country was effectively frozen out of Western financial markets.
Analysts at Bank of America however said that if most of Russia’s oil exports were cut off there could be a shortfall of 5 million barrels per day (bpd) or more, pushing prices as high as $200.
Oil prices see-sawed near 14-year highs on Tuesday, with Brent crude futures up $1.06, or 0.9 percent, at $124.27 a barrel at 0223 GMT, after trading as high as $125.19.
U.S. President Joe Biden held a video conference call with the leaders of France, Germany and Britain on Monday as he pushed for their support to ban Russian oil imports.
But if need be, the United States was willing to move ahead without allies in Europe, two people familiar with the matter told Reuters. Many countries on the continent are heavily reliant on Russian energy.
Russia’s invasion, the biggest attack on a European state since World War Two, has created 1.7 million refugees, a raft of sanctions on Moscow, and fears of wider conflict as the West pours military aid into Ukraine.
Japan tightened its sanctions on Tuesday, freezing the assets of an additional 32 Russian and Belarusian officials and executives of companies with close ties to the government.
HOUSTON (Reuters) — Officials from the Organization of the Petroleum Exporting Countries (OPEC) met U.S. shale oil company executives on the sidelines of the CERAWeek conference in Houston on Monday as energy prices soared over supply concerns.
It was at least the fourth time since 2017 that U.S. shale oil producers and OPEC officials have held such meetings to discuss energy concerns.
EQT Corp Chief Executive Officer Toby Rice, Hess Corp CEO John Hess and Chesapeake Energy CEO Domenic Dell’Osso, among others, attended a dinner with OPEC Secretary General Mohammad Barkindo at a restaurant adjacent to the CERAWeek conference site.
Barkindo said after the dinner that attendees discussed how shale producers were focused on delivering profits to shareholders instead of pouring more cash into new drilling.
“This massive under-investment requires us to revisit that,” Barkindo said. “This is up to the companies themselves and their boards … but there’s this general realization that something needs to be done” to address the new circumstances, he said.
The dinner, billed as the North American Independents Forum, included Equatorial Guinea’s energy minister Gabriel Obiang Lima, OPEC research director Ayed Al-Qahtani and the CEOs of Hunt Energy and Vincent Energy.
A Hess spokesperson who accompanied its CEO declined to comment.
“There is no capacity in the world that could replace 7 million barrels per day,” Barkindo earlier told reporters at the conference. “We have no control over current events, geopolitics, and this is dictating the pace of the market.”
Russia has been an integral part of the OPEC+ alliance that halted a COVID-19 pandemic-driven crash in oil prices through a 2020 agreement to cut 10 million barrels per day (bpd) from the group’s production.
As demand recovered, the alliance has begun returning 400,000 bpd per month to its output. However, Russia’s invasion of Ukraine has led to a new oil shock.
OPEC, US shale executives meet