Dr Nakhle argues that while oil prices retreated this week compared to the previous week (from nearly 140 $/bbl to less than 100 $/bbl), this doesn’t mean that the crisis is over and all scenarios are on the table.
To date, European sanctions on Russia have not targeted the country’s oil and gas industry due to the high reliance of Europe on energy imports from Russia. The 4th round of sanctions simply ban European companies from taking new investments in energy in Russia, but this move does not impact current Russian exports.
Dr Nakhle adds that the European Union (EU) is in a better position than three decades ago as it was able to decrease its reliance on Russian gas from 75% in the 1990s to about 40% in the meantime. However, the EU cannot replace Russian gas supplies overnight. Talks have been taking place with various market players, which can provide some relief.
To date, OPEC has not added barrels to the market as it blamed the rise in prices on geopolitical fears and not supply disruptions.
“No endgame for Ukraine“, Christof Rühl, Feb 2022
“Recent political developments in Ukraine“, Christof Rühl, Mar 2022
“Russia-Ukraine crisis and oil prices“, Dr Carole Nakhle, Mar 2022
“Can Europe decrease its reliance on Russian gas?“, Dr Carole Nakhle, Mar 2022
“Can Europe completely cut its reliance on Russian energy supplies?“, Dr Carole Nakhle, Mar 2022
“Russia, OPEC+, Europe and Energy Markets“, Dr Carole Nakhle, Mar 2022
“EU Energy Policy amidst the Current Gas Crisis“, Dr Carole Nakhle, Feb 2022