On the UK’s position regarding the energy crisis with Russia, Dr Nakhle says that the UK, like most western European countries, is less reliant on Russian fossil fuels than say Eastern European countries for instance. In addition, the UK also produces oil and gas from the North Sea, partially offsetting the need to import all of its energy needs and it also has the infrastructure to import Liquified Natural Gas (LNG) and has been importing it mainly from Qatar for many years. In April 2022, the UK released its Energy Security Strategy that focuses on nuclear and renewable energy sources, therefore diversifying its sources of energy as much as possible. However, the UK is still prone to the volatility in energy prices around the world as these markets are international and inter-connected.
Poland and Bulgaria are also less exposed to Russia than say Germany, given the smaller role of natural gas in their primary energy and electricity mix. They have also access to alternative supplies. Poland, for instance, will start to receive additional gas from Norway by autumn this year, and this explains why the country did not seek renewing its expiring contract with Gazprom.
Although, in the nearer future, consumers will face higher energy bills, we shouldn’t underestimate the negative impact on the Russian economy with probably lasting scaring. The Russian Energy Strategy to 2035 forecasts that even if European demand for oil and gas decreases, Europe will still be the biggest market for Russian energy, in other words, losing the European market will be a big blow for Russia.
Dr Nakhle adds that energy markets are dynamics and we should not solely rely on supply. Demand plays an equal role. Today, major forecasting agencies are expecting a slowdown in economic growth for the world’s largest economies which would translate into a slowdown in demand for oil.
Dr Nakhle is joined by Daniel Melhem, Founder and CEO of Gimtech, and Munsif Al Salimi, Journalist specialised in European affairs.
Watch the discussion (in Arabic):
“Sanctions and the Economic Consequences of Higher Oil Prices“, Christof Rühl, Apr 2022
“Energy Markets and the Design of Sanctions on Russia“, Christof Rühl, Mar 2022
“Is Moscow turning to Asia?“, Dr Carole Nakhle, Apr 2022
“Putin demands gas exports to be paid in rubles, and US SPR release“, Dr Carole Nakhle, Apr 2022
“The EU’s 4th round of sanctions on Russia“, Dr Carole Nakhle, Mar 2022
“Can Europe completely cut its reliance on Russian energy supplies?“, Dr Carole Nakhle, Mar 2022