Crude oil prices could hit $300 per barrel if Western countries ban Russian oil imports, warned Russia's deputy prime minister Alexander Novak.

"It is absolutely clear that a rejection of Russian oil would lead to catastrophic consequences for the global market," Novak said in a statement on state television. "The surge in prices would be unpredictable. It would be $300 per barrel if not more."

The United States on Tuesday announced a ban on oil imports from Russia, taking the price of Brent crude – the international benchmark – above the $130 per barrel mark.

At 10:00 am, the May contract of Brent futures on the Intercontinental Exchange stood at $131.59 per barrel, over 6% higher from its previous close.

Novak warned that it would take Europe over a year to replace the volume of oil it receives from Russia, resulting in significantly higher prices.

"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."

Commenting on Germany's decision to stop the certification of the Nord Stream 2 gas pipeline, Novak said, "We have every right to take a matching decision and impose an embargo on gas pumping through the Nord Stream 1 gas pipeline."

"So far we are not taking such a decision," he said. "But European politicians with their statements and accusations against Russia push us towards that."

On Monday, Brent crude prices skyrocketed to a 14-year high of nearly $140 a barrel before easing to around $130.

In India, state-run oil marketing companies haven't hiked prices of petrol and diesel due to legislative assembly polls. The informal freeze on fuel price hike is expected to be lifted as early as this week.

The steep rise in crude oil prices can cost the government over ₹1 lakh crore in the next financial year if the Centre continues to levy the reduced taxes on petrol and diesel, according to a report by SBI Research.

This will also affect India's current account deficit and inflation as the country imports around 85% of its annual oil requirement.

"If crude oil prices are at an average of $100/bbl., inflation is likely to increase by 52-65 basis points," SBI Research wrote in a report. "Every $10/bbl increase in Brent crude price will lead to an increase in inflation by 20-25 bps."

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