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Current Affairs

Europe’s ban on Russian energy

Date: 08 April 2022 Tags: World Economy


The evidences of Bucha massacre has put pressure on European nations to further impose sanctions on oil and energy sectors of Russia.



Energy imports from Russia amounts to $850 million per day. Sanctions till now have spared oil and gas companies of Russia.



  • Countries in European Union get about 40% of their natural gas supply from Russia, which is used in industries as well as households.

  • This number comes down to 25% in terms of crude oil dependency. It majorly goes towards producing petrol and diesel.

  • Any cut in supply of crude oil will result in rise of diesel prices. This will be catastrophic for transport and farming sector.


European dependency on Russia

  • Europe has very little of its own natural gas and crude oil deposits. The production of these commodities is declining, which has resulted in dependency on imports.

  • Comparatively, the US has little crude oil imports from Russia and no natural gas supply. The domestic production of US is also higher.



  • Replacing piped natural gas by LNG is costly and time-consuming. Only some places have the required LNG terminals that can supply to households.

  • Rest of the continent does not have infrastructure to connect to LNG terminals. LNG prices cannot be as cheap as piped natural gas from Russia.



  • European countries are looking for alternative supply from countries such as Norway as well as Algeria.

  • Many countries have already reduced Russian gas contracts. Most of them will be focusing on renewable energy sources to compensate for Russian gas.


Impact of banning Russian energy

  • Prices will likely soar and countries would experience serious shortages. Many industries will be affected.

  • Large number of jobs may be hit and inflation may rise. A country may go towards recession as its revenue may decrease.