Moscow has warned that if the West bans Russian crude oil over the Ukraine conflict, the world oil and gas market will collapse.

Russian Deputy Prime Minister Alexander Novak said on Wednesday that “without Russian hydrocarbons, if sanctions are introduced, there will be a collapse of the oil and gas markets."

Novak told Russia's lower house of parliament that the European Union (EU) is experiencing "a rise in prices and a shortage of energy resources," after putting a halt on the Nord Stream 2 gas pipeline under pressure from the United States.

He said that there was a shortage of crude in global markets of about 1 million barrels per day (bpd).

Germany halted the Nord Stream 2 gas pipeline project, which was designed to double the flow of Russian gas heading direct to Germany, in response to Russia's military campaign in Ukraine. 

Novak called the ban "absolutely absurd," saying that European consumers will face "greater price increases.”

“The rise in energy prices may be unpredictable,” he added.

Europe, according to Novak, could also face a shortage of diesel, with inventories now at the lowest since 2008.

"I want to emphasize that the complete incompetence of European decision-makers due to ill-conceived policies and lack of strategic planning led to this result,” he added.

Novak said on Monday that oil prices could reach $300 a barrel if sanctions were imposed on oil and gas from Russia.

The US and its European allies have imposed financial curbs on Russia, ranging from an overseas asset freeze on the Russian central bank to a ban on Russian exports of crude oil after President Vladimir Putin ordered “a special military operation” in Ukraine on February 24.

Last week, the International Energy Agency (IEA) warned that the West’s crippling sanctions on Russia threaten the world with the biggest global oil supply shock in decades.

Russia is the third-largest oil producer after the US and Saudi Arabia. But the country is the largest oil and products exporter in the world. Europe depends on Russia for about 40% of its natural gas.