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Irina Slav

Irina Slav

Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.

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The UK Could Give Up Russian Gas Sooner Than Thought

  • The European Union is debating energy embargos on Russia, with natural gas as one of the key talking points.
  • Russia is ramping up threats to cut Europe’s gas if it does not comply with its demands.
  • The UK is predicting that it can leave Russian gas behind earlier than previously anticipated.

In the week when Gazprom finally did what Europe was afraid it would do and started cutting off gas supplies to countries unwilling to pay for them in rubles, Russian gas reliance has really hit the spotlight. And at least one country in Europe believes it can eliminate its dependence on it sooner than previously believed. Bloomberg reported earlier this week that the UK could stop importing Russian natural gas before this year’s end. Citing an unnamed source familiar with the government’s plans, the report noted that Russian gas exports to the UK were already a slim enough portion of total gas imports to make the phase-out possible.

Details on how exactly the government planned to eliminate these imports were not divulged, but given the fact that Russian gas last year accounted for just 4 percent of total UK gas imports, replacing Russia with another supplier will be nowhere near as challenging as the same exercise would be for Germany.

What’s more, Russian LNG cargos—the only form of Russian gas that the UK imports—arriving in the country have fallen further since the start of this year, reinforcing Downing Street’s conviction that the UK can get rid of Russian gas with almost no hassle.

This puts the UK in a comfortable enough virtue-signaling position, from which it can urge its EU allies to reduce their own reliance on Russian gas. These allies, however, will have a harder time following in the UK’s footsteps, with Germany being the most notoriously gas-dependent European economy.

Related: U.S. Recession Fears May Be Overblown

The EU has been discussing energy embargos on Russia for weeks now and has so far only managed to agree on a coal import ban, which will enter into effect from August. This will allow utilities to stock up on the fossil fuel in the meantime.

A gas embargo has also been on the table, but several EU members have voiced strong opposition to the idea. In Germany, businesses and trade unions have joined forces to advise against such an embargo, noting it would devastate the energy-intensive German economy. An oil embargo is an equally hard sell for Germany.

Europe, as a whole, imports some 40 percent of the gas it consumes from Russia. Last year, this amounted to around 155 billion cubic meters. This year, because of the war in Ukraine, the EU has stated it will aim to reduce its intake of Russian gas by two-thirds by the end of the year, using a variety of measures, including a switch to LNG, energy conservation, a buildout in renewables, and increasing the use of coal for power generation.

Meanwhile, however, gas prices soared again this week after Gazprom cut off gas deliveries to Poland and Bulgaria. The president of the European Commission, Ursula von der Leyen, has called on European energy traders not to pay for Russian gas in rubles. Germany’s Uniper, however, has said it had no problem doing just that. Hungary and Austria have also said they would pay for Russian gas in rubles.

The asynchrony between Brussels and the business world has once again highlighted the drawbacks of energy dependence and the importance of local supply. The UK’s relative ease of reducing Russian oil imports also speaks to the latter.

This doesn’t mean that the UK is problem-free and an example for the EU to follow, however. Last month, energy industry association Offshore Energies UK warned that the country’s gas producers were struggling to increase output, which could threaten the security of supply. This, the association said, could result in the UK becoming dependent on imports for as much as 70-80 percent of its consumption in the future.

By Irina Slav for Oilprice.com

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Leave a comment
  • George Doolittle on April 28 2022 said:
    No comment from Wales?
  • DoRight Deikins on April 29 2022 said:
    Ouch!, « ... the UK in a comfortable enough virtue-signaling position, from which it ... »

    Does anyone have the photo of the Johnson administration thumbing their noses in unison in the direction of Brussels?

Leave a comment




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