Alexander Novak told the official news agency TASS that Moscow is prepared to restart gas shipments to Europe through the Yamal-Europe Pipeline. When Poland decided to use the gas already in Germany rather than purchase it from Russia in December 2021, the Yamal-Europe Pipeline’s normal westward flow mostly reversed.
Warsaw terminated its agreement with Russia in May after rejecting Moscow’s demand that it pay in roubles.
Moreover, Gazprom (GAZP.MM), Russia’s largest supplier, retaliated by cutting off supply and announcing that it would no longer be able to export gas through Poland after Moscow imposed sanctions. As part of a lengthy interview with the TASS news agency, some of which became public over the weekend, Novak said that Russia and Azerbaijan have agreed to increase domestic gas supplies. Gas is the backbone of the UK’s energy mix, meeting 44% of the country’s electricity generation in July this year. The current energy supply crisis highlights the challenges countries, such as the United Kingdom, face as oil and gas production declines faster than demand.
What the Future Holds for The Oil
Once the EU embargoes on Russian petroleum products take a toll, Europe will struggle to replace Russian crude oil and product supply.
Europe used to be a major market for our oil products. Let us wait and see what decisions they make in the end. So far, we have no idea what could replace our fuel.
According to the top Russian energy official, some EU member states may request exemption from the embargo on seaborne imports of Russian oil products.
The EU embargo and the EU-G7 price cap on Russian crude oil at $60 per barrel did not immediately roil the oil market. However, traders had concerns about a potential demand hit from slowing economies. Uncertainty is growing about how the bans on Russian imports will affect supply balances in the coming months.
As the EU embargo on Russian diesel imports takes effect, “competition for non-Russian diesel barrels will be fierce, with EU countries having to bid cargoes from the US, Middle East, and India away from their traditional buyers.