Ukraine at the crossroads of a European energy crisis

(EurActiv, 7 Feb 2022) If the Ukraine tensions continue, Russia risks severely damaging its own economy and energy future. But over the next few months, Europe’s energy scene could become very uncomfortable writes, Robin M. Mills.

Robin M. Mills is CEO of Qamar Energy, and author of “The Myth of the Oil Crisis.”

Ukraine, likely named after the Slavic word for “borderland,” has long been a crossroads for peoples, civilisations, trade – and military invasions. As Russia steps up its threats against the country once again, energy is the latest resource to become weaponised.

Russia supplies about 40% of the European Union’s natural gas, and while Britain does not buy Russian gas directly, it is connected to the continent and effectively part of the same market. Prices for gas – both in Europe and globally – have soared to record levels since September, which has also pushed up the continent’s electricity prices to all-time highs.

The economic recovery from Covid lockdowns, combined with weather-related and technical interruptions, drove market tightness. Russia has exacerbated the squeeze, reducing gas sales and not refilling underground storage facilities that it owns in Europe. Fresh fighting between Russia and Ukraine would only push prices higher.

There are three ways that a new Russia-Ukraine conflict might interrupt European energy supplies. Most obviously, either side could damage infrastructure, including by cyberattack or sabotage. This includes the key gas pipelines running through Ukraine, which currently carry about 13% of Europe’s total imports, as well as the southern branch of the Druzhba oil pipeline, which runs through Belarus to western Ukraine and on to Slovakia, Czechia and Hungary.

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EurActiv, 7 Feb 2022: Ukraine at the crossroads of a European energy crisis