If the West follows forward with an embargo on Russian oil, Russia has threatened to shut down its main gas pipeline to Germany.
The rejection of Russian oil, according to Deputy Prime Minister Alexander Novak, would have “catastrophic consequences for the global market,” causing prices to more than double to $300 a barrel.
As a means of punishing Russia for its invasion of Ukraine, the US has been discussing a possible ban with allies.
On Monday, however, Germany and the Netherlands both rejected the idea.
The EU imports over 40% of its gas and 30% of its oil from Russia, and there are no cheap alternatives if supplies are stopped.
Mr Novak claimed it would be “difficult to swiftly find a replacement for Russian oil on the European market” in a speech broadcast on Russian state television.
“It will take years, and European consumers will still pay far more. They will be the ones who suffer the most as a result of this decision “he stated
He said that an oil embargo may result in retaliation, citing Germany’s decision last month to halt approval of Nord Stream 2, a major gas pipeline connecting the two nations.
He stated, “We have every right to make a matching decision and put an embargo on gas flowing through the [existing] Nord Stream 1 gas pipeline.”
Russia is the world’s largest producer of natural gas and the second largest producer of crude oil, and any sanctions against its energy sector would be disastrous for the country’s economy.
Ukraine has pleaded with the West to enact such a ban, but there are fears that it will drive up prices. Fears of an embargo sent Brent crude oil up to $139 (£106) a barrel on Monday, its highest level in over 14 years.
The average price of petrol in the United Kingdom also touched a new high of 155p per litre.
In Asian trade on Tuesday, Brent crude, the global oil benchmark, surged 3.7 percent to more than $127 a barrel.
The Reuters news agency quoted anonymous officials as saying that the US could be ready to go forward with an embargo without its partners, despite the fact that Russia only supplies around 3% of its oil.
However, German Chancellor Olaf Scholz criticized the idea of a broader embargo on Monday, saying that Europe had “deliberately spared” Russian energy from sanctions since its supply could not be ensured “anyother manner” at the time.
European nations, on the other hand, have sworn to gradually shift away from Russian hydrocarbons, while some Western corporations have boycotted Russian imports or agreed to sell their shares in Russian energy firms.
Despite completing all of its contractual responsibilities to export oil and gas to Europe, Mr Novak said that Russian industries were already feeling the impact of US and European initiatives to reduce reliance on Russian energy.
“The talk and words we’re witnessing about a prospective ban on Russian oil and petrochemicals, on phasing them out, alarm us,” he added.
“We’re seeing a lot of strain on our partners, traders, shipping businesses, banks, and financial institutions.”
His remarks came after the third round of peace negotiations between Ukraine and Russia in Belarus stalled.
Since the violence began on February 24, more than 1.7 million Ukrainians have fled to Central Europe, according to the UN refugee agency, with over 1 million landing in Poland.
Dmitry Peskov, a Kremlin spokesperson, told Reuters that if Ukraine stopped fighting, revised its constitution to proclaim neutrality, and recognized Russia’s annexation of Crimea and the independence of territories controlled by Russian-backed rebels, Moscow would suspend operations.
Although minimal progress had been made on logistics for the evacuation of people, a Ukrainian negotiator stated that things had remained basically same.
“At this time, there are no significant improvements in the situation,” Mykhailo Podolyak said.