Can Europe survive without Russian gas? — RT Business News

The US and the European Union are threatening Russia with sweeping sanctions within the occasion of a army battle with Ukraine. These might embody Russian exports of oil, pure fuel, and uncooked supplies. Nevertheless, specialists warn that such measures would backfire on Europe, depriving the continent of Russia’s pure fuel provides and different commodities. With fuel costs already sky-high, storages at a number of year-lows, and spring heat nonetheless weeks away, Europeans might need to hunt various suppliers to warmth and light-weight their houses.

1. What might halt Russian fuel provides to Europe?
   Washington has threatened Russian companies, vitality corporations, and even President Vladimir Putin personally with sanctions if Russia makes an offensive transfer in opposition to its neighbor. The Biden administration has additionally been pressuring EU companions to dam the certification of the newly constructed Nord Stream 2 fuel pipeline, which might have remedied the ravenous European fuel market with its 50 billion cubic meters of fuel yearly. Moscow has not made any declarations relating to closing the faucets on Europe, and main vitality exporter Gazprom has been pumping fuel in accordance with present contracts. Russian fuel flows have shrunk in latest months, prompting some Western analysts to assert that Russia might use its fuel as leverage in response to sanctions.
   
2. Would Russia lower off fuel provides to Europe?
   That is extremely unlikely, until new sanctions goal Russia’s capacity to receives a commission for its exports. Europe stays essentially the most worthwhile marketplace for Russian fuel. In 2020, Russia delivered 175 billion cubic meters of fuel to the continent, way more than to its second-largest market, Asia-Pacific. Russia wouldn’t put its key income in danger. Fuel flows from Russia to Europe weren’t interrupted even on the top of the Chilly Warfare. In truth, traditionally, vitality provides stopped solely as soon as – throughout Hitler’s invasion of the Soviet Union throughout WWII. Nevertheless, provides might be stopped by Western sanctions themselves – for example, if Russia is lower off from the SWIFT cost system.
   
3. Why is SWIFT so crucial?
   SWIFT is the primary international supplier of safe funds and financial institution transfers. Consider it as a bank card for people and nations. With out SWIFT, most nations which use the funds community can’t pay for Russian vitality provides, and Russia has no method of receiving the funds. Since we’re speaking about multibillion-dollar transactions, and containers of money are out of the query, it is rather troublesome to seek out another technique to do enterprise. Western banks must ship cash to Russia’s neighbors, after which the funds must be transferred to Russia by means of the Russian cost system SPFS. This could deal an enormous blow to the whole international financial system and make giant transactions with Russia just about unattainable to hold out. Nevertheless, disconnecting Moscow from SWIFT wouldn’t solely harm Russia, however Europe and different nations as effectively, since it could successfully lower off the West from Russian vitality provides.
   
4. How badly does Russia want the European market?
   Though, as beforehand famous, Europe is a key income, the nation might survive with out it. Russia might discover different suitors for its fuel in Asia. As of November 2021, shipments by means of the Russian fuel pipeline to China, the Energy of Siberia, exceeded 13 billion cubic meters, which is over 3 times their quantity in 2020. Japan and South Korea additionally buy important quantities of Russian liquefied pure fuel (LNG) from the Arctic. Sooner or later, India might change into a doubtlessly large marketplace for Russian fuel.
   
5. Why does Europe want Russian fuel provides?
   Greater than half of the EU’s vitality wants (61%) are met by imports, in line with Europe’s statistics company. Russia is the primary EU provider of pure fuel, accounting for over 46% of fuel imports as of the primary half of 2021. A lot of the fuel comes through the Yamal-Europe pipeline, which connects the EU with Russian fuel fields by means of Ukrainian territory. If Russia closes the faucets as a result of sanctions, or if the fuel circulate is disrupted as a result of some infrastructure injury ensuing from a hypothetical battle in Ukraine, Europe would lose the majority of fuel provides – that are troublesome, if not unattainable to exchange on quick discover. This could propel fuel costs, which almost doubled final yr, to new file highs.
   
6. What different fuel suppliers does Europe have?
   In accordance with Eurostat, other than Russia, the EU will get its fuel from Norway (20.5%), Algeria (11.6%), the US (6.3%) and Qatar (4.3%), in addition to another states whose mixed share is just a little over 10%. Nevertheless, Norway has been unable to fulfill the demand all through 2021, with North Sea fields present process heavy upkeep after pandemic-induced delays, whereas different suppliers have too small a share within the European fuel market at their present volumes to make a distinction in case of a circulate disruption.
   
7. Can different suppliers cowl the shortfall in Russian fuel provides?
   The US administration has reportedly been in talks with Qatar on the opportunity of rising LNG shipments to Europe, however to this point to no avail. Consultants cited by Bloomberg say Qatar is already producing at full capability, and most of its cargoes are despatched to Asia underneath long-term contracts, which it may possibly hardly break for concern of shedding the dear market. Even when the US finds a technique to increase LNG deliveries to Europe, vitality costs would leap nonetheless, as US LNG is dearer than Russian pure fuel. Algeria might have spare manufacturing and pipeline capability to spice up provides to Europe if referred to as upon, a authorities supply, who spoke on situation of anonymity, advised S&P International Platts on Tuesday. These might be delivered as LNG or through Algeria’s direct pipelines to Spain and Italy, the supply mentioned. Nevertheless, no official experiences relating to the matter have been issued, whereas Algeria’s main pipeline linking it to Europe through Morocco was shut down final yr.
   
8. What are Europe’s options to fuel as an vitality supply?
   Europe has quite a few various vitality sources, however none of them might be referred to as upon to substitute for pure fuel. The EU’s resolution to show to weather-dependent sources of vitality like wind and solar energy over ‘soiled’ fossil fuels has already, a minimum of partly, led to the present vitality disaster. Coal has additionally soared in worth, as Europe, China, and others have been on the lookout for options to fuel amid the worldwide pandemic disaster in latest months. Lastly, Europe (with the exclusion of France) has been shutting down one other essential supply of vitality – nuclear energy vegetation – amid its push to part out atomic vitality after the Fukushima nuclear catastrophe in 2011. The vegetation can nonetheless be salvaged if the just lately proposed draft invoice to label nuclear vitality as ‘inexperienced’ comes by means of, however each the invoice and the revival of the closed vegetation, in addition to the development of recent ones, will take time, which Europe doesn’t have.