European countries will not be able to completely abandon Russian energy resources and will partially resume supplies in the future, predicts Dave Ernsberger, co-chairman of S&P Global Commodity Insights.
„I think there will always be a natural demand for Russian oil and gas in Western Europe. This demand is determined by the market. "Ultimately, I believe there will come a time when supplies will resume, although probably not in the previous volumes, as there has been some structural change that could prove long-term," the American analyst said on the sidelines of the international conference “Energy Markets Forum“, which was held in Fujairah.
According to him, if supplies are completely interrupted, European countries will be forced to buy oil and liquefied natural gas at inflated prices. “Alternative sources of supply that can replace Russian energy are located in the United States and the Middle East - much further from Europe than Russia. In addition, US and Middle Eastern energy supplies are transported by tankers, which are more expensive and more susceptible to disruptions than pipelines,“ he noted.
Ernsberger believes that the gradual shift away from Russian energy to Europe is driven not only by the outbreak of hostilities in Ukraine, but also by the recognition of the need to diversify supply sources after the events of 2021. At the time, European countries were facing a crisis amid low supplies in underground gas storage facilities after a record winter drawdown, as well as energy shortages as a result of declining wind power production.