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All you need to know about Europe’s dependence on Russian gas and oil amid the Ukraine war

Russia is one of the world’s largest oil producers, accounting for 10% of global demand. Switching from Russian oil means buying from elsewhere. People fear the price may rise

Russia is one of the largest oil producing countries in the world
Russia is one of the largest oil producing countries in the world

As War in Ukraine continues, Britons have been warned that fuel and gas prices could continue to rise.

Russia is one of the largest oil producers in the world. But how dependent is Britain and Europe and Russia’s oil and gas?

Here, we answer all your questions.

How dependent are UK and Europe on Russian oil and gas?

Gas is of great interest, certainly for the EU, as it gets about 40% of its needs from Russia.

The UK only gets 5% to 6% of its gas imports from Russia, but we are still affected because wholesale gas is a globally traded commodity.

Russia is one of the world’s largest oil producers, accounting for 10% of global demand.







Russian civil aircraft carrier SGV-Flot after being hit by a missile from the Ukrainian port of Mariupol
(

Image:

FSB / TASS)

What if the world, especially the EU, stopped buying Russian gas?

“We will be caught,” said Nathan Piper, oil and gas equities analyst at Investec. “All bets will be ended.”

The obvious short-term alternative is to buy more liquefied natural gas (LNG), which usually arrives on supertankers.

But supplies of LNG have been scarce and prices are high.

The EU and UK may be importing more gas from Norway and North Africa, but they are shipping it at full capacity.







Oil prices rise after Russia’s invasion of Ukraine
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Image:

PA)

Will the EU and other countries stopping Russian gas imports affect Putin?

Yes, although other countries around the world have the ability to buy gas that we and others shun. China is a possible candidate.

What are the alternatives to gas?

Renewables are part of the mix but we are far from being able to rely on them.

Countries can delay the closure of nuclear plants and coal-fired power plants, or dust off mothball plants, despite commitments on environmental impacts and climate change.







Russian President Vladimir Putin
(

Image:

Sputnik/AFP via Getty Images)

What about oil?

Switching from Russian oil means buying from elsewhere, as supplies are already constrained by explosive global demand.

The price of Russian oil has actually dropped about 10% in the past few days, partly due to transportation problems.

But just like gas, if the West rejects Russian oil, there’s always the possibility that someone else – unaffected by possible sanctions – will continue to buy oil.







Putin with Rosneft Oil Producer CEO Igor Sechin
(

Image:

via REUTERS)

What about the price we pay?

Ultimately, any cap on Russia’s oil and gas supplies could lead to higher prices.

The question is whether we are prepared to accept the impact on already strained household budgets and inflation, not to mention what it means for businesses.

For oil, already over $100 a barrel, it could mean much higher prices.

The spike in wholesale gas prices over the past year is the main reason the price cap for 22 million UK households will increase by an average of £700 a year to £1,971 from 1 April.

That’s based on wholesale costs at 128p a heat – 300p currently.

Investec has warned the price cap could soar to £3,000 in October.

If wholesale gas costs stay the same or increase, the impact could be even worse.

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https://www.mirror.co.uk/money/you-need-know-europes-reliance-26362272 All you need to know about Europe's dependence on Russian gas and oil amid the Ukraine war

Fry Electronics Team

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