Russia’s Ukraine war upended energy markets forever – Axios

by | Jan 23, 2023 | Energy

Illustration: Shoshana Gordon/AxiosNearly a year after Russia’s invasion, the Ukraine crisis has permanently reshaped the global energy system and brought severe economic pain.Why it matters: The worst-case scenarios haven’t come to pass, thanks to a mix of EU policies, Russian President Vladimir Putin’s miscalculations and pure luck. But the impact is apparent on every facet of the market, from natural gas to oil to low-carbon energy.Driving the news: Europe’s heavy dependence on Russian gas, which once provided 40% of EU supplies, has been rapidly severed. Now it only accounts for about 14.4% of EU supplies, per S&P Global Commodity Insights.”Russia’s days as an energy superpower are ebbing away,” prominent energy historian and analyst Dan Yergin said.How it works: European gas prices soared to record levels, but have since fallen back to below pre-war levels. That’s partly thanks to more supplies from the U.S. and elsewhere, but it’s also because of planning.European nations have made moves to sever ties with Russian coal, oil and gas and diversify their supplies, conserve energy and fill gas storage facilities.That effort has also prompted EU officials to accelerate and scale up efforts to deploy low-carbon tech like renewables and heat pumps. (There was also some short-term switching to carbon-intensive coal, thanks to the gas price increases and supply crunch.)Luck was also a factor, with unusually mild weather that has cut heating demand.”Widespread shortages, which were once legitimately feared, have not materialized,” writes Financial Times energy editor David Sheppard in a column titled “Vladimir Putin is losing the energy war.”What they’re saying: Analysts say Putin misjudged his ability to wield Russia’s massive gas and oil exports to Europe as a geopolitical weapon.A Center for Strategic and International Studies (CSIS) report notes that Putin, in cutting gas shipments, was “hoping economic pain would break European and transatlantic resolve to suppor …

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