Geopolitica


Ferdinando Angellotti

The consequences of the Ukraine conflict on the relationship between Russia and the EU and the emergence of Qatar as a possible new supplier

Table of contents:

·         Abstract

·         Energy Dependency in Europe

·         The RepowerEU in depth: The European plan to reduce Russian gas imports by two thirds by the end of 2022

 

 

 

Abstract:

 

Russia has a dominant role in the European gas market for several reasons [1](e.g. clear complementarity between hydrocarbon-rich Russia and the technology and capital-intensive market of the EU), furthermore, Russian exports in the European Union substantially increased because of a decline in EU domestic gas production. In the case of Italy[2], domestic gas production fell from 17 billion cubic meters in 2000 to slightly below 4 billion cubic meters in 2020; while the Italian gas consumption needs were between 70 and 80 billion cubic meters in the same period[3]. In 2021, Russia accounted for around 45% of EU gas imports and almost 40% of its total gas consumption. While the EU also imports around 25% of its oil from Moscow, the Union is mainly dependent in the gas field, given that gas markets are more regionalized compared to oil markets. Partially for the same reason, an EU oil ban could be absorbed by Russia by redirecting exports to Asia, but the same cannot be said with regards to gas due to the huge volumes involved. Russian and European energy needs in this field, indeed, as explained by Delorme[4], are highly interdependent due to the fact that while Europe requires gas to sustain its diversified economy, Russian economy - primarly based on natural resource extraction - needs as well export revenues, coming mainly from the EU. It Is also very important to consider that an EU ban on Russian oil could easily trigger a Russian retaliation on gas, as the Kremlin has already warned it could cut supplies to Europe via the Nord Stream 1 pipeline directly linked to Germany. Nonetheless, pressure to adopt energy sanctions is mounting. Since the beginning of the war, Gazprom has continued to supply its EU buyers through the Ukrainian transit route; this means that the EU contributes with a lot of money to the Kremlin's war resources. According to some estimates, each day European states pay around 800 million euros to Russia for gas and oil imports[5].

 

 

 

 

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[1] Petteruti C. (2020). "Diritto dell'ambiente e dell'Energia. Profili di Comparazione".

[2] Di Gregorio A. (2019). "Produzione e valore del comparto oil & gas in Italia nel periodo 2020-2050".

[3] BP, (2020). Statistical Review of World Energy. Available at: https://www.bp.com/en/global/corporate/energy-economics/statistical-review-of-world-energy.html

[4] Delorme, J. et al, (2022). Cutting the Cord: Ending Europe's Energy Dependency on Russia. Tony Blair Institute for Global Change. Available at: https://institute.global/policy/cutting-cord-ending-europes-energy-dependency-russia

[5] Taylor, K. and Noyan, O. (2022). "Stop Financing Putin's War with Energy Imports, Ukrainian NGO Pleads". Available at: https://www.euractiv.com/?p=1722363