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How reliant is the world on Russia for oil and gas? How reliant is the world on Russia for oil and gas?
(11 days later)
Fuel prices have soared since Russia's invasion of Ukraine Energy costs have risen since Russia's invasion of Ukraine
The amount of Russian oil sold to other countries has fallen, although gas continues to flow into Europe. Russia says it is no longer supplying gas to Poland and Bulgaria after the countries refused to pay for their supplies in roubles.
After the invasion of Ukraine, the US, EU, and UK announced restrictions on Russian imports. The EU has said it considers the move to be a form of blackmail.
How has Russia halted gas flows?
Despite the invasion of Ukraine, Russia has continued to supply a large amount of gas to many European countries.
However, after Western powers placed financial sanctions on Russia, President Putin announced that "unfriendly" countries would have to pay for gas in the Russian currency.
The Russian-state-owned energy company Gazprom says it has cut off supplies to Poland and Bulgaria and will not restart these until payments are made in roubles.
Payments in roubles would shore up the Russian currency and benefit its economy.
Who's paying in roubles?
EU Commission president Ursula von der Leyen warned that complying with Russian demands would breach EU sanctions and would be "high risk" for companies that did so.
Gas companies in some EU countries, including Germany, Hungary and Slovakia, have agreed to pay for gas in euros through Russian bank Gazprombank, which will then convert the payments into roubles.
The Financial Times has reported that gas companies in Austria and Italy are also planning to open accounts with Gazprombank.
The EU said last week that if buyers of Russian gas could complete payments in euros and get confirmation of this before any conversion into roubles took place, that would not breach sanctions.
However there are different views among countries on how to interpret its initial guidance, and EU diplomats have said they want more clarity on the issue.
How much gas does Russia supply to Europe?
In 2019 Russia accounted for 41% of the EU's natural gas imports.
If Russian gas supplies to Europe dried up, Italy and Germany would be especially vulnerable as they import the most gas.
Russia only provides about 5% of the UK's gas supplies, and the US does not import any Russian gas.
Russia sends gas to Europe through several main pipelines. The gas is collected in regional storage hubs, and then distributed across the continent.
Poland's gas storage is around 76% full, but Bulgaria's sits around 17%.
"This is not a short-term issue, the problem will be next winter, so it is key to replenish storage," says energy policy research analyst Simone Tagliapietra.
The Nord Stream 2 pipeline and the Ukraine crisis
IEA: Green energy needed to avoid turbulent prices
What are the alternatives to Russian gas?
Bulgaria says it is looking to increase gas imports from Azerbaijan, as well as making deals with Turkey and Greece.
Poland's deputy foreign minister told the BBC there were "options to get the gas from other partners," including the US and Gulf nations.
Europe could turn to existing gas exporters such Qatar, Algeria or Nigeria, but there are practical obstacles to expanding production quickly.
The US has agreed to ship an additional 15 billion cubic metres of liquified natural gas (LNG) to Europe by the end of this year.
The EU hopes to massively boost its use of renewable energy, including wind power
Europe could also increase its use of other energy sources, but doing so is not quick or easy.
The EU has proposed a plan to make Europe independent from Russian fossil fuels before 2030 - including measures to diversify gas supplies and replace gas in heating and power generation.
What sanctions are there on Russian oil and gas?What sanctions are there on Russian oil and gas?
The US has declared a complete ban on Russian oil, gas and coal imports.The US has declared a complete ban on Russian oil, gas and coal imports.
The UK is to phase out Russian oil by the end of the year and the EU is reducing gas imports by two-thirds.The UK is to phase out Russian oil by the end of the year and the EU is reducing gas imports by two-thirds.
Russia has warned banning its oil would lead to "catastrophic consequences for the global market".Russia has warned banning its oil would lead to "catastrophic consequences for the global market".
Oil and gas prices have both risen since the invasion of Ukraine. Despite sanctions, since the start of the war Russia has almost doubled its earnings from selling fossil fuels to the EU, according to the Centre for Research on Energy and Clean Air, as oil and gas prices have soared.
How much oil does Russia export?How much oil does Russia export?
Russia is the world's third biggest producer, behind the US and Saudi Arabia. Russia is the world's third biggest producer, after the US and Saudi Arabia.
Of about five million barrels of crude oil it exports each day, more than half went to Europe, before sanctions were announced.Of about five million barrels of crude oil it exports each day, more than half went to Europe, before sanctions were announced.
Russian imports accounted for 8% of total UK oil demand and 3% of US demand.Russian imports accounted for 8% of total UK oil demand and 3% of US demand.
In early April, Russian oil production had dropped by 700,000 barrels a day, according to the International Energy Agency (IEA). What about alternative oil supplies?
The IEA says the decline could reach 1.5 million barrels a day by the end of the April, and about three million from May. Research analyst Ben McWilliams says it should be easier to find alternative suppliers for oil than for gas, because while some comes from Russia, "there's also a lot of shipments from elsewhere".
This follows European buyers seeking alternative suppliers, and the US banning Russian oil imports altogether in early March.
Russia may try to find new markets for its oil in Asia or elsewhere, but if the drop in production continues, it could eventually impact the country's economy.
What are the alternatives to Russian oil?
Energy policy research analyst Ben McWilliams says it should be easier to find alternative suppliers for oil than for gas, because while some comes from Russia, "there's also a lot of shipments from elsewhere".
Some IEA members have released the equivalent of 120 million barrels from oil stocks - the largest stock release in its history.Some IEA members have released the equivalent of 120 million barrels from oil stocks - the largest stock release in its history.
US President Joe Biden ordered a major release of oil from America's reserves in an effort to bring down high fuel costs.US President Joe Biden ordered a major release of oil from America's reserves in an effort to bring down high fuel costs.
The US also wants Saudi Arabia to increase its oil production and is looking at relaxing sanctions on Venezuela's oil.The US also wants Saudi Arabia to increase its oil production and is looking at relaxing sanctions on Venezuela's oil.
What would happen if Russian gas stopped flowing into Europe?
Supplies from Russia account for about 40% of the EU's natural gas imports. If this dried up, Italy and Germany would be especially vulnerable.
Europe could turn to existing gas exporters such Qatar, Algeria or Nigeria, but there are practical obstacles to quickly expanding production.
Russia only provides about 5% of the UK's gas supplies, and the US doesn't import any Russian gas.
Gas prices in Europe, the UK (and to a lesser extent, the US) jumped significantly after the invasion, due to worries about supply shortages, although they then fell back.
What about alternatives gas supplies?
The US has agreed to ship an additional 15 billion cubic metres of liquified natural gas (LNG) to Europe by the end of this year.
The aim is to supply 50 billion cubic metres per year of additional gas until at least 2030.
But Mr McWilliams says: "It's harder to substitute gas because we have these big pipes that are taking Russian gas to Europe."
Europe could also ramp up the use of other energy sources, but doing so is not quick or easy.
The EU hopes to massively boost its use of renewable energy, including wind power
"Renewables take time to roll out so in the short term this is not a solution," says research analyst Simone Tagliapietra.
"So for next winter - what can make a difference is fuel switching such as opening up coal-fired power plants, as Italy and Germany have plans to do in case of an emergency."
The EU has proposed a plan to make Europe independent from Russian fossil fuels before 2030 - including measures to diversify gas supplies and replace gas in heating and power generation.
The Nord Stream 2 pipeline and the Ukraine crisis
IEA: Green energy needed to avoid turbulent prices
What will happen to my heating and fuel bills?What will happen to my heating and fuel bills?
Consumers will face rising energy and fuel bills as a result of this war. Consumers will face rising energy and fuel bills. Heating prices - already high - are likely to increase even more if Russia restricts gas exports to Europe.
Heating prices - which are already high - are likely increase even more if the flow of Russian gas into Europe is restricted. Heating bills are set to rise sharply this year in the UK
In the UK, household energy bills have been kept in check by an energy price cap.In the UK, household energy bills have been kept in check by an energy price cap.
But bills rose £700 to about £2,000 in April when the cap was increased. They are expected to reach about £3,000 when the cap is increased again this autumn.But bills rose £700 to about £2,000 in April when the cap was increased. They are expected to reach about £3,000 when the cap is increased again this autumn.
UK petrol and diesel prices have also soared, and the government has now announced a cut in fuel duty as motorists struggle with record prices. UK petrol and diesel prices have also soared, and the government has announced a cut in fuel duty as motorists struggle with record prices.
Heating bills are set to rise sharply this year in the UK
"I think if we're in a world where Russian oil and gas stop flowing to Europe then we're going to need rationing-style measures," says Mr McWilliams.
"Part of the conversation now is, can we tell households to turn their thermostats down one degree, which can save a significant chunk of gas."
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