Ferrari president Sergio Marchionne says supplying Red Bull with an engine would have been "dangerous" to the Italian team.
Red Bull spent much of 2015 in search of an alternative power unit supplier for next season after falling out with Renault. After talks with Mercedes fell through Red Bull turned to Ferrari, who considered the partnership and the demands for engine parity before opting against it.
McLaren then vetoed a potential tie-up between Red Bull and Honda before the Milton Keynes team agreed a deal to continue using Renault engines with TAG Heuer branding for 2016.
When asked to explain the reasoning behind Ferrari turning down Red Bull, Marchionne said: "We had to cope with some uncertainties of our own architecture and we had to bridge the technological gap. So committing to providing an equivalent power unit to a team that has a chassis design technical ability to compete could have been dangerous to Ferrari's competitiveness."
Marchionne does not believe there is any benefit for Ferrari if it spends hundreds of millions on a power unit, only for someone else to use that to win a championship.
"My main commitment is to support and protect Ferrari. I'm not interested in defeating Mercedes with Red Bull. If someone says let's use Ferrari's engine so we can defeat Mercedes, I'm not interested in that argument. I want Ferrari to win. We know Red Bull's abilities are good, they destroyed us with Sebastian Vettel and the championships they won.
"If we look at Red Bull investing important amounts into their chassis development and then we equip them with a power unit at a certain price reflecting much higher investment than what they pay for, it's inequality on the track. We're not interested in that."