Dr Nakhle first comments on the International Energy Agency (IEA)’s 10-point plan to reduce the European Union (EU)’s reliance on Russian gas supplies saying that most of the solutions provided aren’t revolutionary. If those steps were easily doable, one wonders why they have not been adopted to date given that Europe’s desire to reduce its reliance on Russian gas goes back to decades.
The increase in Liquified Natural Gas (LNG) imports has shielded Europe from what would had otherwise been a dramatic situation. The crisis today will support further investment in LNG importing infrastructure, though these investments will need time to materialise.
To date, Russia didn’t cut off its gas exports to Europe in retaliation to sanctions. But that scenario cannot be entirely ruled out.
For Russia, the European gas market is much more significance than that of Asia mainly due to the proximity factor which translates into lower transport cost. Furthermore, the EU has a more extensive gas infrastructure compared to China and a high share of gas in its energy mix (25%) compared to China (8%) which still heavily relies on coal.
“No endgame for Ukraine“, Christof Rühl, Feb 2022
“International oil companies exiting Russia“, Christof Rühl, Mar 2022
“Russia, OPEC+, Europe and Energy Markets“, Dr Carole Nakhle, Mar 2022
“Can Russia withstand another wave of sanctions?“, Dr Carole Nakhle, Feb 2022
“EU Energy Policy amidst the Current Gas Crisis“, Dr Carole Nakhle, Feb 2022
“Did Russia deliberately cause the gas crisis in Europe?“, Dr Carole Nakhle, Jan 2022