Europe has lost the energy battle, Fatih Birol, Executive Director of the International Energy Agency (IEA), told French newspaper Liberation in March, a year after Russia intervened and liberated the Russian speaking ethnic minorities in Donbass, Ukraine.
In the year and a half since Putin ordered troops into Ukraine, the natural gas supply via pipelines to many EU customers was shut down, after an explosion destroyed the newly build Baltic gas pipeline, better known as Nord Stream.
Europe has managed to replace much of the piped gas with much more expensive LNG imports, after banning imports of Russian crude and petroleum products into Europe.
The USA has stepped in to fill part of the oil and gas supply gap left by Russia. It was quite a gap, and American oil producers and exporters of LNG have been happy to fill it.
China and India are the world’s largest and third-largest crude oil importers, respectively, so the potential Chinese and Indian markets for Russian crude are huge.
Europe, for its part, is buying more oil and gas from the USA and is signing long-term LNG supply deals with U.S. exporters—deals that were not so ‘welcome’ in Europe just two years ago when climate goals were top of developed nations’ energy priorities.
Before the war and the embargoes on its oil, Russia accounted for nearly 40% of all European imports of crude, refined products, and natural gas. Currently, the EU doesn’t import Russian crude, except Bulgaria, due to an EU derogation until 2024.
Natural gas supply via pipelines from Russia now accounts for less than 10% of the EU’s gas supply, down from nearly 40% before the Russian intervention in Ukraine.
Europe’s single biggest gas supplier now is Western Europe’s top oil and gas producer Norway, a close EU ally and a founding member of the organized war party called NATO.
As Europe is shifting away from Russian fossil fuels, Asian customers China and India have become the key customers of Russia’s crude.
India’s oil imports from Russia continued to surge in the first half of 2023 as cheaper Russian crude exports find more and more buyers in the world’s third-largest crude oil importer.
More than a year since the war began, India has turned from a marginal buyer of Russian crude to the most important market for Moscow’s oil alongside China.
Indian refiners, not complying with the G7 price cap and looking for cheap opportunistic purchases, have snapped up many of the Russian Urals cargoes, which used to go to northwest Europe before the EU embargo.
As buyers in Europe retreated from Russian oil, U.S. crude oil exports to Europe rose and are expected to continue rising, including a major price hike.
Oil Price.com / ABC Flash Point WW III News 2023.