How Russia's war on Ukraine reshaped the energy world
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Russia's invasion of Ukraine upended global petro-flows — maybe forever — but the effects on low-carbon transition are tougher to parse.
Why it matters: Monday marks three years since the launch of the attack. Here are some effects within energy circles ...
Climate crosscurrents. There was plenty of chatter when the war started that it would speed energy transition in Europe and perhaps beyond.
- Yes, but: It also put the spotlight on U.S. LNG as shipments to Europe grew, while then-President Biden in 2022 urged U.S. oil producers to boost supply.
- Driving the news: The Atlantic Council's new global survey of energy experts — from industry, academia, government and more — is mixed on this question.
- What they found: 38% see the conflict slowing the process toward net zero, 31% see an accelerant, while the remainder see no effect. And just 25% see a major impact in either direction.
It's a new map. Europe's efforts to shun Russian oil and pipelined gas have redirected shipments, deepening Kremlin energy ties with China and India.
- Zoom in: China's oil imports from Russia rose to 2.4 million barrels per day last year, per IEA data. India's increase has been stunning, rising from roughly 100,000 barrels per day in 2021 to roughly 2 million in 2023 and 2024, per IEA.
- State of play: Europe vastly curbed imports of gas from Russia, once its dominant supplier, thanks to cutting pipelined supply. LNG shipments from its eastern neighbor have risen, but overall Russia now has just a small fraction of its prior 40% share of European gas imports.
Real but limited economic pushback on the Kremlin. Russia's "shadow fleet" of tankers has stymied the effects of oil sanctions and the G7-led price cap.
- The big picture: Volumes have declined slightly, but Russian oil has been an "enduring" presence, said Landon Derentz, senior Atlantic Council energy analyst. The conflict has not deterred a "meaningful portion of Russian oil flows from reaching the market," he said.
What we're watching: U.S. talks with Russia over ending the war.
- U.S. Treasury Secretary Scott Bessent has raised the prospect of tougher oil sanctions to force talks, and easing restrictions as an incentive.
- Meanwhile, there's chatter about what once sounded far-fetched: resumption of large-scale Russian pipeline gas flows to Europe, which is grappling with high prices, if the war ends.
