In this interview with Nasser El Tibi from Al Arabiya News Channel, Dr Carole Nakhle, CEO of Crystol Energy, comments on the possible scenarios for the impact of sanctions on Russia on global energy markets.
Dr Nakhle argues that we should be prepared for all scenarios, as the situation is still unfolding. In the worst case, analysts fear around 4.5-5 million barrels per day of Russian oil can be ‘lost’ from the market – equivalent to ~5% of global supply. However, oil is a liquid market and supplies could be eventually redirected. Oil trading is not that transparent as the Iranian experience has told us. Some traders might still be purchasing Russian oil under the radar benefitting from the big discount Russian crude grades are trading at.
She adds that after every energy crisis, there is usually a tendency to decrease the reliance on the source of energy or supplier that triggered the crisis in the first place. Europe’s dependency on Russian gas has been constantly decreasing from more than 75% in the 1990s to 40% nowadays. The conflict today will accelerate the trend.
The short-term winners are gas suppliers such as Norway, Qatar and the US; thanks to LNG, gas trade is easier than it has ever been. In the longer term, renewable energy will be deployed at a faster rate, while nuclear energy won’t grow as fast due to the diverging views of the technology within the European Union.
Watch the discussion (in Arabic)>
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