LONDON, Sept 9 (Reuters) – Russia warned the West on Friday that plans to try to curb the price of Russian oil and gas exports in retaliation for the war in Ukraine will fail and ultimately destabilize the United States and Europe. The standoff over Ukraine has prompted European Union customers to reduce purchases of Russian energy, while both the G7 and the EU are trying to impose a price cap on Russian oil and gas. Shortly before the EU announced a price cap on Russian natural gas on Wednesday, President Vladimir Putin threatened to cut off supplies if such caps were imposed, warning the West that it would freeze like a wolf’s tail in a fairy tale. The Group of Seven major industrialized nations wants to impose an oil price cap that would ban the insurance, financing and brokerage of oil cargoes priced above a yet-to-be-determined price ceiling for crude and two products oil. Russian Foreign Ministry spokeswoman Maria Zakharova said the West did not understand how such steps would ultimately affect their own countries, which would eventually slip. “The collective West does not understand: introducing a price ceiling for Russian energy resources will lead to a slippery floor under its feet,” Zakharova said. Russia’s top lawmaker said on Friday that the West’s plans would fail and that prices would soar well beyond their artificial price ceiling. “What G7 state officials call a price ‘ceiling’ will become a price floor,” Vyacheslav Volodin, the speaker of Russia’s lower house of parliament, the Duma, wrote on his Telegram channel. “The global market is not limited to seven countries.” The statements from Moscow show the depth of the standoff with the West, which Putin says is a declining US-dominated coalition that aims to bind – or even destroy – Russia. The EU says it is in an energy war with Russia. EU energy ministers met on Friday to try to find a way to protect citizens from excessively high energy prices and prevent electricity companies from collapsing. “We are in an energy war with Russia,” Czech Industry Minister Jozef Šikela said upon his arrival at the emergency meeting in Brussels. ‘ENERGY WAR’ Western efforts to punish the world’s largest producer of natural resources, from oil and gas to gold, metals, coal and timber, are no easy feat, especially when China, India and other consumers are still keen to keep buying . But Putin’s threat to redirect Russian oil and gas flows eastward would amount to the biggest shift in Russian energy policy since the Soviets built gas pipelines west to Europe from Siberia at the start of the decade of 1970. Russia is the world’s second largest oil exporter after Saudi Arabia, the world’s leading natural gas exporter. Europe typically imports about 40% of its natural gas and 30% of its oil from Russia. Since the start of the war, European Union customers have pledged to reduce their dependence on Russian energy, while Russia has cut or cut off supplies to three of its largest gas pipelines to the west, while oil supplies have redirected to the east. Russia’s Gazprom GAZP.MM has been studying for years the possibility of a major new natural gas pipeline – Power of Siberia 2 – traveling through Mongolia carrying Russian gas to China. The proposed pipeline could carry 50 billion cubic meters (bcm) of gas a year, Gazprom says – slightly less than Nord Stream 1, the currently closed pipeline linking Russia to Germany under the Baltic Sea . The existing Power of Siberia pipeline, which runs from Russia to China, started up in late 2019 with an annual capacity of 61 bcm per year. (Reporting by Reuters Editing by Guy Faulconbridge) (c) Copyright Thomson Reuters 2022
