Russia warns of $300 barrel oil, threatens to cut gas to Germany as Biden, UK announce ban

President Joe Biden finally caved to growing political pressure from both Democrats and Republicans on Capitol Hill on Tuesday, announcing a ban on Russian oil imports in response to the unprovoked invasion of Ukraine, even though Russia warned of $300 a barrel oil prices while saying it would close a major gas pipeline to Germany.

“It is absolutely clear that a rejection of Russian oil would lead to catastrophic consequences for the global market,” Russian Deputy Prime Minister Alexander Novak said Monday in an address on state television, according to CNBC.

“The surge in prices would be unpredictable. It would be $300 per barrel if not more,” Novak added.

Facing the prospect of soaring gas prices ahead of the midterms, the White House had initially resisted a ban, saying it wasn’t in the U.S. “strategic interest,” but Biden relented to calls to take what many considered to be the one action that would hurt Russian President Vladimir Putin most.

“Today I am announcing the United States is targeting the main artery of Russia’s economy. We’re banning all imports of Russian oil and gas and energy,” President Biden said at the White House. “That means Russian oil will no longer be acceptable at U.S. ports and the American people will deal another powerful blow to Putin’s war machine.”

“This is a step we’re taking to inflict further pain on Putin,” the president said, adding, “I said defending freedom is going to cost. It’s going to cost us, as well.”

He also made it a point to claim that both parties were willing to endure the cost while insisting he was not holding back domestic energy production.

“Republicans and Democrats alike understand that,” he said. “Republicans and Democrats alike have been clear that we must do this.”

The United Kingdom also announced restrictions on buying Russian oil import just before Biden’s announcement. The move coming one day after Ukrainian President Volodymyr Zelenskyy  called for “a boycott of Russian exports, in particular, the rejection of oil and oil products from Russia.”

Citing Germany’s decision last month to halt the certification of the highly contentious Nord Stream 2 gas pipeline, CNBC reported that Novak threatened a possible cut off.

“We have every right to take a matching decision and impose an embargo on gas pumping through the Nord Stream 1 gas pipeline,” the Russian official said. “So far, we are not taking such a decision,” Novak said. “But European politicians with their statements and accusations against Russia push us towards that.”

Russia account for 32% of Germany’s gas imports and Chancellor Olaf Scholz said Monday the country will continue to do business with Putin.

“Europe has deliberately exempted energy supplies from Russia from sanctions,” Scholz said in a statement. “At the moment, Europe’s supply of energy for heat generation, mobility, power supply and industry cannot be secured in any other way. It is therefore of essential importance for the provision of public services and the daily lives of our citizens.”

Stressing that finding alternative energy supplies “cannot be done overnight,” Scholz added, “That is why it is a conscious decision on our part to continue the activities of business enterprises in the area of energy supply with Russia.”

The European Union announced Tuesday morning that it will begin to wean itself off of Russian fossil fuels.

“We simply cannot rely on a supplier who explicitly threatens us,” European Commission President Ursula von der Leyen said in a press release, according to CNBC.

Without offering specifics, the Russian deputy prime minister suggested they have other potential customers lined up.

“European politicians need to honestly warn their citizens and consumers what to expect,” Novak said. “If you want to reject energy supplies from Russia, go ahead. We are ready for it. We know where we could redirect the volumes to.”

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