Fears have been realised as energy prices rise as a result of the crisis in the Ukraine. There’s worry that the unrest will interrupt one of the major routes for supply.
Analysts are calming fears and panic by reassuring people that the EU gas stocks are in a good place allowing them to balance the unrest. This seemed to ring true as oil prices rose by 2%.
Unsurprisingly there’s worry between traders that the Ukraine crisis could destabilise the supplies of energy from Russia. Although not as big as they were the last time supplies were cut, Russia still makes up a quarter of natural gas used by Europe. Half of that gas is routed through the Ukraine.
In the UK, many consumers have enjoyed a mild winter that has kept the escalating costs down. The decrease in the need for fuel has also left energy storage facilities with 20% more than they would usually have at this time of the year.
Germany for instance, look to lose the most if there is an interruption to supply, as they are Russia’s best customer their gas consumption is high. Yet because of the mild winter they have sixty days’ worth of gas due to an extra 60% stored over the coldest season of the year.
No Longer Held Over an Oil Barrel
Ten years ago an interruption in supply from Russia would have left us quaking in our boots. In fact it did! Since then Europe has taken steps to loosen the bond, to become a little more self-sufficient so reliance was not on Russia for oil. Significant improvements have been made with less than a third of natural gas being imported from Russia this is a drop from almost a half ten years ago.
In this time other supply routes have been explored and utilised, ensuring the Ukraine has little or no impact on the exportation of energy from Russia.