The EU is aiming to accelerate the phasing out of Russian gas supplies and is fostering a new approach to the energy sector that pools together gas purchasing companies. The ongoing war in Ukraine has placed the international energy sector in an extremely precarious position. Either end the energy business with Moscow, and face an increase in gas prices, or continue to purchase Russian-made energy resources and provide Putin with the resources to continue his “special military operation.”
The Russian invasion of Ukraine has placed the international energy sector in a dangerous position
The Russian invasion of Ukraine shook the international energy sector to its core. Following the start of the war, nearly four years ago now, energy prices across both the gas and oil sectors skyrocketed to unprecedented levels.
Many geopolitical experts have noted that the ongoing reliance on Russian energy resources gives Moscow the funds to keep the war going. To combat this reality, the EU, along with the United States, has announced the newest round of sanctions against Russia, which feature a phase-out of Russian gas imports into the European bloc within the next few years.
The EU has launched a new scheme that aims to promote local gas production as opposed to relying on Russian imports
Following the new sanctions and the approval by EU energy ministers to phase out Russian gas contracts, the EU has announced a new platform that aims to pool together gas suppliers and match them with potential customers. This will inevitably boost the bloc’s ability to increase local gas production and place increased pressure on Putin to end the war and save the Russian economy.
The European Union has increased LNG imports from other nations, like the United States
The EU bloc has noted its increased reliance on other gas-exporting countries like the United States. Following US President Donald Trump’s failed face-to-face summit with Vladimir Putin in Alaska in August, Mr Trump imposed additional sanctions against Russia.
Additionally, the EU has noted the new pooling of potential gas buyers to match them with alternative gas suppliers in the region, stating that they are serving merely as a connection platform for the gas sector and have no hand in negotiations between suppliers and customers.
The European Union’s leaders have stated their support for the relaunch of the pooling platform
EU Energy Commissioner Dan Jorgensen said that the EU will relaunch its gas pooling system in the weeks to come, noting that the aim is “to help get competitively priced and diversified supplies” in the European region.
“We will launch a dedicated gas demand aggregation exercise for companies in this region.” – EU Energy Commissioner Dan Jorgensen
As the EU bloc realigns the energy sector, several companies have seen stronger Q3 upstream performances, exemplifying the region’s ability to operate without RUssian energy imports. Europe will need to step up its game and phase out the use of Russian-made energy resources, be it gas or oil.
The end of the Russian dominance in the gas sector is a lot closer than expected
The inevitable end of Russian imports of gas may be a lot closer than one might suspect. The EU’s leaders have set a hard deadline to fully phase out Russian gas contracts in the next few years. Backed by the enigmatic US President, the EU’s new stance towards ending Russian gas contracts in the next few years has placed Moscow in a dangerous position. The relaunch of the pooling system in the EU bloc will foster domestic gas production and, no doubt, boost local energy companies’ expertise and bottom lines as the sector grows across the continent.
