What will be the effects of the war on Russia’s oil and gas?

2 March 20222 years ago babelfish

Russia's oil and gas demand, supply and prices. Facts and scenarios with the war in Ukraine

According to the scenarios indicated by many economic analysts about Russia, the global demand for oil and gas is expected to remain the same, regardless of the Russian invasion of Ukraine.

But if Russia is prevented from selling its gas to Europe, then the supply will decrease, driving up prices.

In 2006, the Russian state-owned energy company Gazprom cut off gas supplies in transit through Ukraine and the effects were immediately felt across Europe.

Shortly after Russia launched a full-scale invasion of Ukraine and recognized two breakaway regions of Ukraine – the Donetsk People's Republic (DNR) and the Luhansk People's Republic (LNR) -, German Chancellor Olaf Scholz promised on February 22 to decertify the Nord Stream 2 gas pipeline.

Two days later, EU leaders imposed sanctions on Russia's financial, energy and transport sectors, which will drive up the price of energy and possibly create shortages.

Over the past year, imports of LNG to Europe from the United States have increased. But it is not clear how Europe or the United States should replace all the oil and gas lost by Russia.

European gas costs are now set to be $ 200 billion higher than the January forecast.

Russia is a member of OPEC Plus and produces about 10 percent of the oil barrels sold in the world.

But in OPEC Plus is Kazakhstan, which is currently a member of the Russian-led Collective Security Treaty Organization ( CSTO ). Beyond pro and anti-Russia stances, a gas shortage or price hike could be exacerbated by OPEC members siding with Russia.

Russia's ability to sell energy to China could ease sanctions and end up being a victory for the Communist Party of China.

In 2021, the two countries increased their energy trade to over $ 140 billion and expect to further increase it to $ 200 billion by 2024. They are also working on the Power of Siberia-2 pipeline, a proposed mega pipeline through Mongolia, to supply Russian energy to China.

This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/energia/domanda-gas-petrolio-guerra-ucraina/ on Tue, 01 Mar 2022 06:55:02 +0000.