Russia understands where to reroute oil if rejected by Europe, U.S. - Novak

MOSCOW. March 7 (Interfax) - Russia is seeing partners, traders, transport companies, and banks being pressured into stopping to buy Russian oil and petroleum products, but knows where to reroute them in the event of refusal by the United States and Europe, Russia's Deputy Prime Minister Alexander Novak said on Monday.

Russia is Europe's biggest oil supplier, accounting for 30 per cent (around 150 million tonnes) of its total consumption of 500 million tonnes, in addition to 80 million tonnes of petroleum products, he said.

"Both before and now, Russia has fully honored all of its obligations, all requests are being granted, oil and petroleum products are shipped as planned. However, we are concerned by the discussions and declarations regarding a possible embargo imposition and to reject Russian oil and ;petroleum products. We are seeing this huge pressure being put on our partners, traders, transport companies, banks and financial institutions," Novak told Rossiya-24 television channel.

"I want to stress that such claims and actions are only heating up the market. We are seeing today prices have already gone above $130 per barrel. What is more, everyone knows that deliveries of oil and petroleum products from Russia have been the most competitive to date for Europe, with its developed infrastructure and logistics of marine deliveries.

"It is absolutely obvious that refusing Russian oil would lead to catastrophic consequences for the global market. The price surge will be unpredictable, at over $300 per barrel, if not more. And because the volume of Russian oil on the European market won't be substituted quickly, not in one year, t will be far more expensive for Europe's consumers. Under this scenario, they will be the hardest hit.

"European politicians should honestly warn their citizens and consumers about what awaits them and that fuel, power and heating prices will soar. Other markets will also be affected, America included.

"If you no longer want Russian energy supplies, then that's okay, we are ready. We understand where we can reroute those volumes. The only question is: who needs it? And what for?" Novak said.

It was reported that Russian companies were struggling to sell oil and petroleum products from seaports, with shippers wary of carrying Russia's oil, which in turn led to a rise in freight prices, and banks refusing to lend.