Russia did not expect to lose the economic war. However, after the start of a full-scale invasion of Ukraine, they have already lost the gas war. Unlike oil, which is easily transported by ocean-going tankers, gas is transported most efficiently and economically by fixed pipelines. Building pipelines takes a lot of time and money. And the Russian Federation cannot quickly find a replacement for the EU.
This is stated in the publication of The Atlantic. In the 2010s, European consumers preferred to rely on cheaper and more reliable pipeline gas from Russia. Then, in 2021, a year before the Russian attack on Ukraine, Europeans sharply discovered the limits of Russian energy reliability.
European economies have proven much more resilient, and Russia’s gas weapons far less formidable than feared. The story of this success is a story of great ingenuity. Over the past 12 months, European countries have achieved an excellent energy turnaround. They reduced the demand for gas. European natural gas consumption in 2022 was estimated to be 12 percent lower than the 2019-21 average. A further reduction in consumption is projected for 2023.
European Union governments have spent about 800 billion euros ($860 billion) to subsidize fuel bills in 2022. The United Kingdom has provided an emergency subsidy of £400 ($500) per family to cover fuel costs. Germany routinely re-exports almost half of its gas imports, and despite domestic shortages due to the crisis, it has continued to re-export a similar share to EU partners.
As European countries reduced their consumption, they also changed their sources of supply. The star of this part of the story is Norway, which has replaced Russia as Europe’s biggest gas supplier. Norway has rebuilt its offshore fields to produce less oil and more gas.
As GLOBAL HAPPENINGS wrote earlier, Russia made a mistake in its assessment of the situation on the gas market. The price turned out to be several times lower than predicted in the Russian Federation.
Source: Obozrevatel
I am a journalist who writes about economics and business. I have worked in the news industry for over 5 years, most recently as an author at Global Happenings. My work has focused on covering the economy news, and I have written extensively on topics such as unemployment rates, housing prices, and the financial crisis. I am also an avid reader and have been known to write about books that interest me.
