Current Affairs

How Europe depends on Russian gas supply?

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  • Categories
    World Affairs
  • Published
    22nd Jul, 2022
  • Context

    After the EU imposed sanctions and provided weaponry to Ukraine, Russia shut off gas supplies to six nations and limited supply to another six.

  • Background

    • European nations are heavily dependent on Russian gas supply through various pipelines, e.g., Nord Stream Pipeline 1 and 2.
    • In the backdrop of the Russian invasion to Ukraine western nations have imposed various sanctions on the Russian banks and Officials, leading to a diplomatic power tussle between Russia and the west.
    • In retaliation Russia has decided to cut off the gas supply to the west, threating the energy security of the European nations.
  • Analysis

    To what extent Europe is dependent on Russian supplies?

    According to the data of 2021, the major European economies that depend on Russian gas supply for their energy security:

    Major economies

    Share of Russian oil


    6% (Lowest)











    Bosnia & Herzegovina and Moldova

    100% (Highest)

  • How does supply shortage impact on European economy?

    • Energy security: The cutting off of gas supply will have severe implications on Europe’s energy security.
    • Shutting down of units: Owing to the supply shortage, the manufacturing and factory units will have to be shut down.
    • Winter trouble: During winter season energy demand increases as the homes, offices and units needs to be warmed and heated.
    • Energy inflation: Due to shortage of supply and high prices European nations are experiencing a situation of high inflation.
    • Domino inflation: Energy inflation contributes to price rice in several other commodities, like increase in price of food and other utilities.
    • Reduction in other demands: Due to rise in cost of food, fuel and utilities people have less money to spend over other goods and service.
    • Stagflation: Energy inflation is a contributor to the situation if stagflation, as the economy is facing an inflationary trend with less than optimum employment creation.
  • How the supply shortage impacting Russia?

    • Revenue collection: Russia’s revenue from exporting oil and gas to Europe has doubled over the average from recent years, to $95 billion. The increase in Russia’s energy revenue in just the last five months is three times what it typically makes by exporting gas to Europe over an entire winter.
    • Diplomatic hold: Utility bills and energy recession will undermine the public support for Ukraine in Europe and increase the sentiment to draw a negotiation table in the favour of Russia.
  • What Europe can do?

    • Diversifying the energy resources: European nations should diversify the energy resources to fill the gap between the energy demand and supply.
    • Diversifying the source: Huge dependency upon Russian supply has led to this position of energy crisis in the Europe. European nations should diversify the source of imports to mitigate the future energy crises.
    • Conservation: For the immediate measure Europe should more rely upon energy conservation as the demand for the energy will increase during the winter months, which will require a sustainable buffer.
  • Conclusion:

    A diplomatic channel and negotiation ground is the need of the hour for energy security in Europe and peace and stability in the region. The stagflation in the European nations will have a domino effect for the global economy.

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