campanella25_Planet One ImagesUCGUniversal Images Group via Getty Images_oil Planet One Images/UCG/Universal Images Group via Getty Images

Europe’s New Energy Map

Since Russia launched its war on Ukraine, European countries have had to rethink their energy strategies and secure supplies of natural gas and oil from elsewhere. The economic and geopolitical effects of these changes will be profound, and they will not be confined to Europe.

MILAN – The war in Ukraine is transforming Europe’s energy map. With Europeans increasingly purchasing liquefied natural gas (LNG) from Norway, Qatar, and the United States, as well as natural gas from North African and Central Asian producers, Russia is no longer the key supplier. The composition of European oil imports is also changing now that EU bans on Russian crude and petroleum products are in force, targeting around 2.5 million barrels per day (b/d).

The Middle East is likely to benefit most from these adjustments, allowing it to reclaim the prominent market position that it partly lost with the US shale revolution and the global transition to cleaner energy sources over the past decade.

In theory, redrawing the oil map is easier than redrawing the gas map. The oil market is globally integrated and largely free of major barriers to the international flow of crude shipments. By contrast, the natural-gas market is more regionally fragmented, because gas has traditionally been transported through pipelines. A massive global proliferation of liquefaction and regasification facilities would be required to make the LNG market as wide-ranging and efficient as the oil market.

https://prosyn.org/SFSsNjr