Russia Sanctions: Can the World Cope Without its Oil and Gas?

Russia Sanctions: Can the World Cope Without its Oil and Gas?by Jake Horton & Daniele Palumbo

Ukraine says Russia is waging a "gas war" against Europe, by once again reducing supplies into Germany. Since the invasion of Ukraine, Western countries have sanctioned Russian oil and gas, prompting warnings of retaliation from Moscow

How much Russian gas does Europe use?

Russia supplied the EU with 40% of its natural gas last year.

Germany, Europe's largest economy, was the largest importer in 2020, followed by Italy.

The UK imported just 4% of its needs from Russia and the US doesn't import any gas from Russia.

However, they are also affected when Russia restricts supplies to mainland Europe, as this causes global gas prices to rise. Gas prices have almost doubled in the UK over the last year.

 
Russia gas exports

What sanctions are in place on Russian gas?

The EU says it will cut gas imports from Russia by two-thirds within a year, but has stopped short of a total ban.

To help reach its goal, member states have agreed to cut gas usage by 15% over the next seven months.

However, there's doubt over where the EU will find alternativesupplies.

"It would have to turn to producers such as the US and Qatar, which would ship liquefied natural gas (LNG) in tankers," says energy advisor Kate Dourian.

"But there aren't enough LNG terminals in Europe. This will be a problem for Germany, particularly."

How has Russia responded?

President Vladimir Putin has demanded that "unfriendly" nations in Europe pay for gas in Russian roubles. This helps support the value of Russia's currency.

 

Poland, Bulgaria and Finland refused to do so and Russia cut off their supplies.

Several European energy companies are paying for gas via Russian bank accounts, which convert euros into roubles. They insist those payments are in line with sanctions.

Gas pipelines map

Will Europe run short of oil?

It will allow oil to continue to be imported by pipeline. EU leaders say this is a "temporary measure" because countries like Hungary and Slovakia depend on it.

The US has declared a complete ban on Russian oil imports. The UK is to phase out Russian oil imports by the end of the year.

Many European nations could have their oil supplies squeezed by the ban.

(for the rest of the article, visit bbc.com)

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