A coalition of business leaders has sent a letter to the European Commission President von der Leyen calling for a redoubling of efforts to tackle climate change. The coalition of business leaders includes EDF, Coca-Cola Europacific Partners and Iberdrola. They say that the war in Syria and the ongoing economic crisis in Ukraine are reasons for redoubling efforts to combat climate change.
EU imports 90% of its gas consumption
The EU currently imports nearly 90 percent of its gas from Russian sources. This could drastically reduce EU energy bills in the coming years, but there are also a few ways to diversify Europe’s energy sources. While the EU imports nearly three million barrels of Russian oil a day, it could easily replace these imports with US or Iranian fuels if negotiations between Russia and the European Union are successful. The EU could also reshape its supply chains from other countries, like Canada, Norway and the UK.
The EU already imports 90 percent of its gas from Russia, but the proposed changes will significantly reduce its dependence on Russian oil and gas. The EU wants to reduce its dependency on Russia by two-thirds by 2022 and be independent of Russian fossil fuels by 2030. This is an ambitious plan. But it will be hard to achieve in the short term unless all member states increase their gas storage capacity. Until then, some countries may be forced to increase their coal use in the months to come.
While the EU imports 90% of its gas consumption from Russian suppliers, the UK is less dependent on Russian supply. It draws half its gas from domestic sources, and the other half comes from Norway. Spain, for example, does not even feature on the list of countries that depend heavily on Russian gas. Its main trading partners are the U.S. and Algeria. There is a way out, but it will require massive investments and hard work.
Russia provides 25% of oil
With sanctions on Russia looming, it’s becoming increasingly difficult for the European Union to make the transition away from fossil fuels from the Russian Federation. In the past few years, the EU has been working with its allies to put pressure on Moscow to cut back its dependence on Russian oil and gas. Despite its long-term reliance on Russian oil, the EU is still importing 35 percent of its oil and gas and nearly 20 percent of its coal. In May, the EU is expected to propose a plan to phase out its dependence on Russian fossil fuels. However, the initial plan would focus on developing imports of hydrogen and biogas.
The EU needs to diversify its energy sources – reducing its dependence on Russian fossil fuels could save the EU around 40 million barrels of oil a day. In addition to cutting its dependency on Russian oil, the EU could reduce its dependence on Russian natural gas by signing trade agreements in the Middle East, Africa, and Americas. In addition, the EU should boost local energy production in order to decrease its dependency on Russian oil.
If the EU were to increase its demand for natural gas, it would require a massive increase in Russian oil and gas exports. However, if the EU increased its consumption of oil and gas, it would not have to rely on Russia to supply the additional energy. Instead, the EU would be less dependent on Russian oil and gas, and their proportion of the EU’s gas market would fall accordingly. Hence, the EU should be more strategic in its energy trade relations with Russia.
OPEC cuts forecast for oil demand in 2022
OPEC has cut its forecast for oil demand for 2022 after global economic growth slowed in the first half of 2019. In a report released last week, the cartel said that demand for crude oil would increase by 3.3 million b/d in the second half of the year and 6.2 million b/d in the third quarter. The group also said that global oil demand would reach pre-pandemic levels in 2022. However, despite these changes, OPEC still believes that the oil market will be in a surplus in the first quarter of 2022.
The OPEC report states that there are numerous risks to global growth, citing an outbreak of COVID-19 in China and Russia’s invasion of Ukraine. If the war continues into June, however, the damage to global economic growth could be much greater. While OPEC has reduced its forecast for oil demand in 2022, it is still unclear how much the cut will impact the market. But it is important to note that if the war persists and continues for a long time, it will likely exacerbate global economic growth.
OPEC and its allies, including Russia, are continuing to negotiate with the United States to relax sanctions against Iran, which could affect oil demand. OPEC has rolled back some of its record production cuts during the global pandemic and hopes that the new agreement will help them reach a balance between supply and demand. But the next time they meet, on May 5, they may cut the output even further.
Gazprom has huge assets
Russian energy giant Gazprom has huge assets. Its oil subsidiary, Gazprom Neft, produces over 41 million tons of oil per year and has reserves of over 2 billion tons. The company has subsidiaries and majority stakes in companies across several industries. Its assets are huge, and it has a huge amount of power. So why does it have such a high valuation? There are several possible explanations. Read on to find out how the company has managed to build such an enormous business empire.
A recent attack on Ukraine could alter the West’s energy relationship with Russia. The Russian government is the biggest shareholder of Gazprom, and this unprovoked attack could significantly weaken its value. Shareholders have urged the company’s board of directors to impose more controls on the company’s management. A recent move by the Russian government to freeze the certification process for Nord Stream 2 may also help to improve the company’s financial condition.
Russian financial experts have suggested that Gazprom may have a stake in Itera. While Gazprom and Stroitransgaz have denied any cross-ownership, the company has not responded to detailed questions regarding the deals. Boris Fyodorov, a former finance minister who represents foreign investors, has raised the issue in a recent board meeting. He argues that Gazprom’s massive assets are a gold mine for Russia.
Iran is a powerful tool against Russian energy dominance
The United States and Russia have a long-term animosity towards each other, and both countries have taken sanctions against each other. Nevertheless, Iran rejects U.S. dominance in the global system and seeks to curtail it in its own region. As a result, Moscow and Tehran are partners in opposing the current world order. Whether this animosity has any effect on the relationship between Russia and Iran remains to be seen.
Russia and Iran’s cooperation on energy matters has grown more significant than the competition between the two. Although the two countries have some disagreements over Syria strategy, oil production caps, and the divide of the resource-rich Caspian Sea, these differences have been successfully managed and seem to be headed toward resolution. Russia has a strategic interest in seeing its neighbor thrive and become a major player in global energy markets.
Russia’s support for Hezbollah, an Iranian ally, and the Russian military have been a source of friction in the past. The Islamic government is unsatisfied with the support provided to these Shiite forces by Russia and is seeking alternative markets. Its inaction in Syria and Lebanon, where it has a vested interest, is also causing friction. With that in mind, Russia and Iran will continue to be allies.
Russia sanctions on energy companies
As part of its efforts to counter Western sanctions over Ukraine, Russia has imposed new sanctions on energy companies. The companies targeted are part of the Gazprom Germania group of subsidiaries. Germany took over a Gazprom subsidiary in April. The sanctions also target EuRoPol GAZ S.A., the company that owns the Polish portion of the Yamal-Europe gas pipeline. The sanctions ban transactions with these companies and restrict their entry into Russian ports. The government is closely monitoring the situation to ensure that they are compliant with international sanctions.
In addition to preventing US persons from engaging in new energy investments in Russia, the Executive Order also prohibits certain activities related to the energy sector in Russia. Despite the restrictions, certain transactions between US and non-US entities are still allowed. Of course, this ban does not apply to liquefied natural gas and crude oil. The sanctions are also not applicable to liquefied natural gas and other energy commodities. So, the U.S. government is actively working to make these restrictions more stringent.
As part of its economic sanctions against Russia, the European Union has banned some transactions between EU companies and Russian state-owned enterprises. These firms are linked to the Kremlin’s military-industrial complex. The EU executive reached a preliminary deal on Monday, but no objections were raised before the deadline. The EU is also banning imports of steel from Russia, which would affect around 3.3 billion euros. EU companies will also be prohibited from exporting luxury goods over 300 euros, such as jewelry.
