Intensifying stress between Russia, Ukraine, and the West has increased concern regarding Russian gas flows to the European Union. And with lawmakers and energy providers struggling to prepare contingency plans. Â
Highlights:
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- One lacs troop near Ukraine borderÂ
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- Russia to cut Europe gas supplyÂ
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President Joe Biden informs that there is a “distinct possibility” that Russia could invade Ukraine as soon as next month. Â
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“Little ground for optimism,” said the Kremlin after the U.S. rejected its main demands to resolve the crisis.Â
Russia has assembled around one lacs troop near the Ukraine border Ukraine. Yet denies entering the former Soviet republic.Â
Senior portfolio manager, Rob Thummel at energy investment firm Tortoise Ecofin, said “European natural gas supplies are well below their typical norms and inventories, so a key question to ask is if Europe has enough natural gas inventory to survive,” in a research note.
He also added, “Given that there’s a lot of winters left, I think there are scenarios where it could become challenging, and inventories could go low. Energy is so essential, and Europe needs Russia from an energy standpoint. It’s going to be very difficult just to cut off supplies for both sides”.Â
Form lasts a few months
Form lasts a few months; Russia has been accused of intentionally disrupting gas supplies. And to leverage its role as a significant energy supplier to Europe between an increasing dispute with Ukraine.Â
A period is expected that Russian gas flows to Europe have been lower than typical. Also, political analysts suggest that Moscow has purposefully withheld supplies that sped up the highly contentious Nord Stream 2 pipeline certification.Â
Russia’s pretended role in inflaming Europe’s energy crunch. Even the matter of a rare public rebuke from the International Energy Agency. Additionally, the group called on Russia to uplift gas availability to Europe. Plus, ensure the storage levels were filled to adequate levels in high winter demand.Â
Whereas the Kremlin has repeatedly disputed claims that it uses gas as a geopolitical weapon with state-owned.Â
In the current situation, as Russia-Ukraine tensions reach a fever height. The energy analysts are deeply concerned with the risk of complete supply disruption to the EU. It receives roughly 40% of its gas via Russian pipelines and several runs through Ukraine.Â
What actions will Europe take if gas flows are disrupted?Â
The expectation of a supply cut-off of Russian gas is seen as likely to result in public health and economic consequences. Â
The Energy analysts at political risk consultancy Eurasia Group believe the worst-case scenario of Russia abruptly cutting off all supplies to Europe is also the least likely scenario. Â
“Even if a full disruption of Russian gas exports to the EU remains unlikely, officials and energy providers there have been making contingency plans,” analysts at Eurasia Group said.Â
The inflows of natural gas supplies, while costly, are likely to “significantly” help the western European and Mediterranean regions. Still, it is not thought to be as helpful for landlocked areas of central and eastern Europe.Â
In the matter of a total shutdown of Russian gas supply to the EU. Eurasia Group analyst said that the LNG incoming fleet would be “insufficient” to meet Europe’s gas demand. In this scenario, gas prices have seen spiking “to unprecedented levels”.Â
The European Union via Ukraine
More likely, tensions increase, partial disruption of Russian gas flows to the European Union via Ukraine.Â
“This would still cause significant economic harm and possibly lead to some localized heating and power shortages, especially in southeast Europe, which already suffered similar disruptions during a Russian cut-off of gas supply through Ukraine in 2008/2009,” analysts at Eurasia Group said.Â
Further, he added, “If this happened, Moscow would likely try to shield its biggest customers, Germany and Italy, from the worst impact”. Noting U.S. or European Union sanctions would probably clearly target Russia’s remaining gas exports to Europe. It is deemed to cause too much harm.
Published By – Ranjit Gohite
Edited By – Subbuthai Padma
