Russian President Vladimir Putin warned that tightening sanctions targeting the Russian oil and gas industry will lead to a global energy price shock, causing oil and gasoline prices to increase sharply everywhere, including in the US.
If the amount of oil and our oil products in the market decreases sharply, prices will immediately increase. And the United States is not out of the picture, Putin said at a press conference in Moscow on October 23.
The statement came just a day after the Trump administration announced a new package of sanctions, blacklists Russian oil giants Rosneft, Lukoil and 34 subsidiaries - a move to "stuck" Russia's energy revenue amid a more than three and a half-year-long conflict in Ukraine.
According to Mr. Putin, it will take years and hundreds of billions of USD to be invested in to replace Russia's oil and oil products in the global market.
It is possible to replace part, but not all. That requires a lot of time and huge investment capital, Putin said, pointing out that even the International Energy Agency (IEA) has been forced to change its stance, calling for increased investment in fossil energy - something the organization has previously opposed.
Now people understand that for many years or even decades to come, humanity cannot live without hydrocarbures, the Russian leader emphasized.
Mr. Putin said that those who advised President Trump to impose sanctions on Russian oil "are working against the United States itself".
If Russian oil supplies fall, US gasoline prices will increase sharply and as the election schedule approaches, that will be very sensitive. Those who give such advice should wonder whose interests they are serving, Putin said.
Russia and Saudi Arabia are currently the two largest oil exporters in the world, while the US consumes up to 20 million barrels per day, more than domestic production capacity. We sell more than we consume, while the US does the opposite, it produces less, consumes more, Putin added.
World oil prices rose nearly 5% immediately after the US sanctions were announced, due to concerns about tight supply. Chinese state-owned oil groups have temporarily stopped buying Russian oil in the short term, while Indian refineries - the largest customer of Russian crude oil - have also significantly cut import volumes.
However, Mr. Putin was cung: "This is an unfriendly act, but it will not significantly affect the Russian economy. No self-respecting country changes its decision under pressure.
In response, President Donald Trump told the press: If he thinks like that, thats fine. In six months, we will see who is right.
