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New Energy World
New Energy World embraces the whole energy industry as it connects and converges to address the decarbonisation challenge. It covers progress being made across the industry, from the dynamics under way to reduce emissions in oil and gas, through improvements to the efficiency of energy conversion and use, to cutting-edge initiatives in renewable and low carbon technologies.
Fundamental change for global energy security
23/3/2022
6 min read
Russia’s invasion of Ukraine has triggered a cascade of sanctions with long-lasting implications for geopolitics and global energy security. Brian Davis reports how analysts at Rystad Energy perceive the potential impact in terms of oil and gas supply, and the speed of transition to renewables.
Russia’s ferocious attack on Ukraine in late February triggered a raft of sanctions as OECD countries united in a concerted effort to terminate dependence on Russian energy supplies. Within days, certification of the Nord Stream 2 pipeline was suspended and Western companies including BP, Shell, Equinor, ExxonMobil and others withdrew from major Russian projects.
The green shift is now likely to accelerate in Europe, motivated by energy security. Countries such as Germany and Italy are expected to ramp up LNG gasification capacities, with Germany planning to build new regasification plants at Brunsbuettel and Stade. However, in the medium term, carbon emissions could rise as coal switching replaces some Russian gas supplies in Europe.
Russian oil exports could plummet by 3–4mn b/d as a direct and indirect impact of sanctions. Although Saudi Arabia and the United Arab Emirates (UAE) are reported to have spare capacity, there may still be some delays in meeting any shortfall. Strategic reserves of 60mn barrels are ready for release in the US and OECD, but US production is only likely to ‘respond meaningfully’ towards the end of the year, according to Rystad Senior Analyst Louise Dickson.