Energy expert Dan Yergin on Russia-Ukraine tensions, gas prices
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Russian President Vladimir Putin would have to bear the consequences if he tried to “weaponize gas supplies to Europe” as Russia-Ukraine tensions escalate, according to energy expert Dan Yergin.
According to him, it is more likely that gas supplies will be cut off by violence than because they are being weaponized.
“So [Putin] could weaponize it on a broader sense, and then Europe would have to scramble — but it will be deeply damaging to his future market for natural gas if he were to do it,” said Yergin, who is vice chairman of IHS Markit. I believe disruptions due to violence in the area, along with sanctions are more probable.
Russia is the largest supplier of natural gas in Europe, accounting for more than 30 percent. Europe’s markets have been linked via a network of gas pipelines that pass through Ukraine.
Yergin warned last monthThe Russia-Ukraine crise is a major problem for the gas market.
Before, the Kremlin used energy to apply political pressure. It has. cut off Ukraine’s gas supplyDue to price disputes in 2006 and 2014 after its annexe of Crimea. In 2009, Russia again cut off gas supplies — this time to EuropeUkraine
Tensions between Russia and Ukraine spiked in recent months as Russia built up around 100,000 troops along its border with Ukraine.
It sparked concerns that Russia may be preparing to invade the country, and set off fears of a repeat of the Kremlin’s illegal annexation and occupation of Crimea in 2014. These allegations have been repeatedly refuted by Moscow.
Any confrontation has the potential to destabilize the whole region given Ukraine’s location — separating Russia and the EU.
There has been much talk about the crisis. the U.S. could impose sanctions on Russia to stop the Kremlin from invading Ukraine.
$100 for oil
Yergin indicated that oil markets are “very nervous” right now. While tight supplies have caused prices to rise, they are also being supported by Russia-Ukraine tensions.
Basically the only place in the world where you have spare capacity that could be called upon in an emergency, are just two countries — Saudi Arabia and Abu Dhabi, and that’s a definition of a tight market.
Dan Yergin
vice chairman, IHS Markit
Recent rise in crude prices to $90/barrel has been a sign of an almost 20% increase this year and more than 60% gain since the start of 2021.
Analysts have forecast that oil prices could rise up to $100/barrel.
Yergin stated that the scenario could mirror 2011 when crude oil prices increased to $100. They stayed there for three consecutive years.
“I feel right now, we have market that’s crisis prone,” said he.
OPEC has partnered with non-OPEC countries to form OPEC+. This energy alliance is also known as OPEC+. return some supply to the market, by an additional 400,000 barrels per day for March.
Yergin warned that producers might have trouble returning to their previous production levels.
Because of the lack of investment and maintenance, not all producers are able to return to their previous levels. They’re not returning 400,000 barrels per day to the market. CNBC has been informed that the market is receiving less.
“Basically the only place in the world where you have spare capacity that could be called upon in an emergency, are just two countries — Saudi Arabia and Abu Dhabi, and that’s a definition of a tight market,” Yergin added.
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