Behind the Russian-Ukrainian conflict: the energy war is in full swing

The smoke of the Russian-Ukrainian conflict has not yet dissipated, and the chain reaction is interlocked
.

Russia, which ranks among the top three in the world in terms of oil and gas reserves and production, has always been the most important and irreplaceable energy supplier to the EU
.
Based on Russia's unique position in the field of traditional fossil energy, especially in oil and gas storage, in addition to the smoke of the frontal battlefield, an energy dark war is being staged
simultaneously.

Europe speaks of energy "derussia"

Alternative supply is nowhere to be found

Europe's indigenous energy resources are quite limited and have long been highly dependent on imports, and the largest supplier of these resources is without exception Russia
.
According to the EU Energy Agency, in 2021, natural gas and coal from Russia accounted for 45% and 46% of the energy imported by the EU, and crude oil accounted for 27%.

Even in the UK, which has "left the EU", about 36% of coal imports from Russia
.
It is no exaggeration to say that in the field of traditional fossil energy, Russia controls the energy lifeblood
of Europe.

In recent years, although EU countries have made every effort to promote energy transformation through the large-scale development of renewable energy, energy supply security, especially the looming gap in natural gas supply, has always been the "sword of Damocles"
hanging over the EU's head.

After the outbreak of the Russian-Ukrainian conflict, European countries have become increasingly eager to get rid of their dependence on Russian energy
.
In early April, the European Union announced that it would ban the import of Russian coal, and in early May it announced that it planned to ban all forms of Russian oil imports
in an "orderly manner" for the next six months.
As for the main energy source, natural gas, the EU has also publicly stated that it will replace two-thirds of the natural gas
imported from Russia within this year.

However, although the EU has "released harsh words", the "irreplaceability" of Russian energy in the foreseeable future has embarrassed Europeans, and EU member states are even more deliberate, and it is difficult to really agree on Russian energy sanctions
.
For example, Hungary is clearly opposed to the EU putting Russian oil on the sanctions list, and Slovakia, the Czech Republic, Bulgaria and other EU countries have also unanimously stated that they cannot stop importing Russian crude oil
in a short period of time.

On the issue of prohibition and prohibition, the EU's biggest and only concern is that if Russian energy is abandoned, where will the alternatives come from?

Taking oil as an example, some insiders estimate that the oil supply gap caused by EU sanctions against Russia will be as high as 4 million barrels per day to 6 million barrels per day, equivalent to 4.
5%-6.
7%
of global oil production in 2020.
Although OPEC and Iran have considerable spare capacity, these two forces are not active in filling the vacancy left by Russia's possible "supply cut": on the one hand, Iran, which is suffering from US sanctions, cannot release capacity
on a large scale in the short term.
On the other hand, OPEC does not want to see international oil prices fall due to too much capacity entering the market, and the power to increase production is obviously insufficient
.

The situation of ensuring the supply of natural gas is even more severe
.
Qatar, which has second only reserves to Russia and Iran, has proven powerless to quickly help the EU emerge from the gas crisis, as 75 percent of the country's gas exports are locked in
long-term contracts with Asian buyers.
In addition, Wang Nengquan, chief economist of Sinochem Energy, pointed out: "About 90% of the natural gas imported from Russia in Europe is pipeline gas, and if imported from countries with 'replacement' potential around the world, the vast majority can only be liquefied natural gas (LNG), and it will take a long time
to build new LNG receiving and regasification facilities.
" ”

The European Union, which is eager to get rid of its energy dependence on Russia as soon as possible and is difficult to become energy independent in the short term, has a great tendency to "hurt the enemy by one thousand and lose eight hundred" in the sanctions against Russia - the energy crisis in the region that began in the winter of 2021 has intensified, and there has been no sign of
improvement.
In the case of coal that is not "welcomed" by the EU, the price of coal delivered in May in Europe has risen by more than double digits
.
Citigroup's statistics show that the benchmark price of European natural gas futures has soared to its highest level since 2005 in February this year, and the electricity prices in European countries have also risen sharply, coupled with the continuous rise in oil prices, and it is expected that European spending in the energy sector will exceed $1.
2 trillion this year, a new high
since 2008.

With high energy prices, many economic indicators in Europe are inevitably deteriorating
.
Eurozone inflation reached 7.
5 percent in April, six consecutive months of record highs, with double-digit rates in the Baltic states and countries such as the Netherlands
, according to Eurostat.
The International Monetary Fund report also predicts that this year, the gross domestic product (GDP) growth rate of Europe's advanced and emerging economies will fall to 3% and 3.
2%,
respectively.
Germany, for example, has already warned that energy sanctions against Russia will cause Germany's GDP to fall by 5% this year, and direct economic losses will reach 165 billion euros
.

In view of the dire energy supply situation, the European Commission recently called for the resumption of the construction of a natural gas pipeline linking Spain and France in order to allow Algeria's natural gas to flow into Europe
.
According to the original plan, after the pipeline is completed and put into use, Algeria's gas supply to Europe can be increased from the current less than 100 million cubic meters per day to more than 200 million cubic meters per day
.
But restarting this near-"rotten" project is by no means an easy task, and although the Spanish side is in favor of restarting the project, it does not want to share the huge restart funds
.

The United States picked up the big stick of sanctions instead

The "de-dollarization" of energy trade has unexpectedly accelerated

Whether it is the Russian-Ukrainian conflict or the sanctions against Russia, the United States is the most active participant in
it.
Geopolitical reasons aside, the deep involvement of the United States also has energy considerations
.

After the "shale revolution", the United States surpassed Russia with an annual production of more than 700 billion cubic meters of natural gas, becoming the world's largest natural gas producer
.
U.
S.
natural gas, which continues to blow through, needs more markets, but Europe, which sees natural gas as its mainstay, has long had closer
ties with Russia.

Relevant data show that of the about 300 billion cubic meters of natural gas that Europe needs to import every year, 150 billion cubic meters to 200 billion cubic meters come from Russia
.
Since most of Russia's gas pipelines to Europe need to pass through Ukraine, Europe has repeatedly faced the threat
of natural gas supply cuts due to Russia-Ukraine discord.
In 2014, Germany and Russia led the construction of the "Nord Stream 2" gas pipeline, planning to bypass Ukraine and directly deliver 55 billion cubic meters of natural gas to Germany every year, when the energy ties between Europe and Russia will undoubtedly become closer, and the political and economic relations between Russia and Europe are expected to undergo qualitative changes
.

However, after the outbreak of the Russian-Ukrainian conflict, under pressure, Germany had to suspend the approval process of "Nord Stream 2", resulting in the completion of this huge project that was only waiting for ventilation to be reduced to decoration
.
In the eyes of observers, cutting off the energy ties between Russia and Europe is an important strategic goal of the United States, and the "abandonment of Nord Stream 2" is exactly the situation
that the United States is happy to see.

Dong Xiucheng, a professor at the Institute of National Opening Up of the University of International Business and Economics, said: "This Russian-Ukrainian conflict has provided a rare opportunity for the United States to
further control Europe.
In recent years, the United States has made every effort to cut off the energy relations between Europe and Russia, such as sanctioning the 'Nord Stream 2' related enterprises, actively exporting natural gas to Europe, the core goal is to gradually weaken the relationship between Europe and Russia, and then avoid the EU and Russia getting closer and closer, so as to strengthen the US-EU alliance, control the overall pattern of Europe, and maintain the hegemonic system
.
”

While cutting off the "physical connection" between Russian energy and Europe, the United States has also joined forces with Europe to carry out a "financial war"
against Russia on an unprecedented scale and intensity.
In the early stages of the Russian-Ukrainian conflict, the United States and Europe joined forces to kick some Russian banks out of the Society for Global Interbank Financial Communications (SWIFT) and freeze Russia's assets in Western countries in an attempt to turn the ruble into "waste paper"
.

Under the high pressure, Russia made a tough response, announcing that since April 1, the European Union, the United States and other "unfriendly" countries and regions that import Russian gas must be settled
in rubles.

The ruble against the dollar, the fire on the energy battlefield is burning more and more vigorously
.

After Russia's "ruble settlement order" was issued, the United States quickly reached an agreement with the European Union to supply an additional 15 billion cubic meters of natural gas
to Europe in the form of LNG by the end of this year.
However, the industry generally believes that compared with the current volume of Russian natural gas imported from Europe, the increase in supply in the United States is really a "drop in the bucket"
.
At the same time, Professor Cha Daojiong of the School of International Relations of Peking University also pointed out that if the United States increases LNG exports to Europe, it will inevitably push up its domestic gas prices, and it will not be conducive to the United States to control inflation
.

For the fat meat of the European natural gas market, it is difficult for the United States to swallow it in
one bite.
In the financial sector, on the contrary, the status of the US dollar as the "world currency" is being severely challenged
.
The sanctions against Russia have hastened to some extent the "de-dollarization" of energy trade that Russia has been trying to promote
.

After the issuance of the "ruble settlement order", Armenia took the lead in saying that it had begun to use rubles to buy Gazprom in
April.
The EU country Hungary also quickly took a stand and agreed to pay
in rubles.
What is even more embarrassing to the United States is that the United Kingdom, which first "followed the trend" in sanctioning Russia, suddenly agreed on April 22 that its own companies would settle gas purchases through Gazprom by the end of May
.
On the same day, the European Commission said that without violating the relevant provisions of sanctions against Russia, companies in the EU region "it is possible to use rubles for natural gas transaction settlement"
.

As for countries that refuse to pay in rubles, Russia "says what it says"
.
At present, the supply of natural gas
to Bulgaria, Poland and Finland has been suspended.

In fact, after the frequent use of US sanctions on the US dollar as a weapon, many energy producers are mulling the "de-dollarization"
of energy trade.
Saudi Arabia, for example, is already considering accepting currencies other than the dollar as a currency for payments for crude oil purchases, while Iran has excluded
the dollar from commercial activity.
In addition, Russia and India have also announced the establishment of a "ruble-to-rupee" trade payment mechanism, which will continue to buy Russian oil
in large quantities at "affordable" prices.

Reuters pointed out that a series of sanctions led by the United States will force the use of the ruble and other currencies in trade to "passively increase", which will weaken the dollar's position in global trade and have a long-term and far-reaching impact on
the cost of borrowing and financing in the United States.
The BBC said that the dollar's status as the "world currency" has lasted for more than half a century, but the authoritarian style of the United States has made more countries accelerate their pursuit of "de-dollarization"
.

"At present, many countries have agreed to use ruble settlement when purchasing Russian gas, and it is expected that more countries will join in the
future.
" As a result, the dollar's position will be weakened
.
It can be said that the United States is accustomed to using dollar settlement as a sanction weapon, and it is constantly spending the credibility
of the dollar.
The United States has built up the dollar's credibility for more than 100 years and is now destroying it
with its own hands.
PetroChina overseas expert Liu Guizhou told reporters
.

The international oil market changes frequently

OPEC declined to increase production

At a time when Europe, Russia and the United States are "fighting in the open and dark" around energy, OPEC, which once dominated the ups and downs of the international oil market, is very "calm"
.
As a strong force in the international oil and gas market in the past, OPEC did not rush to take action in the face of the current chaos, but resisted the pressure from Europe and the United States and insisted on continuing the previous rhythm
of production cuts.

"Oil producers in the Middle East may think more about profits than rush to increase production to seize the market
.
" Liu Guizhou predicted
.

Wang Nengquan also expressed a similar view: "After the outbreak of the Russian-Ukrainian conflict, international oil prices continued to fluctuate at a high level, but this was not caused by the imbalance between supply and demand in the
market, but more by panic.
The United States and the International Energy Agency (IEA) have released crude oil reserves, and the United Kingdom is also increasing oil and gas production
.
Based on this fact, the oil-producing countries in the Middle East will not increase production
significantly.
”

Judging from the actual performance of the market, OPEC really has no intention of selling
.
In early March, the two international benchmark oil prices, Brent crude oil and the US WTI crude oil futures both exceeded $110 / barrel, and the IEA and its member states announced that they would release a total of 120 million barrels of crude oil reserves
.
But in stark contrast, the "OPEC +" production reduction alliance is still "going its own way" and decided to continue the previous moderate production increase plan
.
Although European and American countries, led by the United States, have repeatedly urged OPEC to quickly increase crude oil supply, OPEC has refused to increase production
further on the grounds that "the current price fluctuations do not reflect changes in market fundamentals".
During this period, the leaders of two important OPEC member countries, Saudi Arabia and the United Arab Emirates, even refused the US president's telephone communication invitation
.

It is worth mentioning that as the "leader" of OPEC, Saudi Arabia's relations with the United States seem to be declining in recent years
.
Benefiting from the "shale revolution", the United States' unconventional oil production has been surging in the past 10 years, and the unexpected increase in supply has led to a sharp decline in international oil prices, and the United States' voice in the international oil market has increased significantly, and the influence of Saudi Arabia and its leading OPEC has been declining
.
In this context, in order to rebalance the market, OPEC member countries and 10 non-OPEC oil producers led by Russia reached a production limitation agreement and formed an "OPEC +" production reduction alliance
.
In other words, while moving away from the United States, OPEC's relationship with Russia is entering a kind of "honeymoon period", which has become a profound change in the international oil market in
recent years.

"The Middle East, especially the OPEC countries led by Saudi Arabia, have their own inherent policy considerations of maintaining stable and reasonable
oil prices by limiting production.
OPEC's market share has been decreasing, which has led to the 'OPEC+' mechanism, and these resource countries have taken some measures to stabilize oil prices, and the effect is very obvious
.
It is expected that these resource countries will not dance with the will of the United States, but will adopt policy choices
that are more favorable to their own interests in the international game.
Dong Xiucheng pointed out
in an analysis.

Energy security "priority" increased

The pace of global carbon reduction is quietly changing

The ripple effect of the Russian-Ukrainian conflict has once again highlighted the importance of energy security in the traditional sense, that is, the energy supply must always be greater than demand, and its "priority" has greatly surpassed the energy transition that has been in full swing in recent years
.
This phenomenon is particularly evident
in the "parties" of Europe.

Europe has always been extremely active
in its green transition and in tackling climate change.
In 2020, the EU has set ambitious targets
of "reducing greenhouse gas emissions by 55% by 2030 and achieving carbon neutrality by 2050".
However, the energy crisis caused by the Russian-Ukrainian conflict has caused many countries in Europe not only to regain nuclear power that has been abandoned, but even to "embrace" coal power again
.

The "Green Energy Act" announced by the European Union earlier, which listed natural gas and nuclear energy as "green energy" together, once caused great controversy
.
At present, the Czech Republic, France, Poland and the United Kingdom are all seeking to build new nuclear reactors
.
Prior to this, Russia, which has always attached great importance to the development of nuclear power, has strong financing capabilities and has been a strong competitor
in the European nuclear power market.
It is worth mentioning that with the outbreak of the Russian-Ukrainian conflict, all commercial exchanges with Moscow have become "taboos" for EU countries, which has given the United States nuclear power technology room
for imagination in Europe.

At the same time, Germany took the lead in announcing the establishment of strategic coal reserves, Italy, France, Poland and Spain also said that they would delay the withdrawal of coal power, and the United Kingdom went further and began to consider new coal-fired power plants
.
Timmelmans, the European Commission's first vice-president, even said publicly that EU countries "can stay on coal longer"
before switching to renewables.
Before the outbreak of the Russian-Ukrainian conflict, it was unthinkable that such statements and actions would appear in Europe
.

In fact, there are already signs of
high carbonization of energy use in Europe and non-falling carbon emissions.
According to data released by research institute Resta Energy, in 2021, coal-fired power generation in Europe increased by 18% year-on-year, interrupting the downward trend
since 2012.

In this regard, Dong Xiucheng believes that under the current situation, European countries have no choice to restart coal power in order to get rid of their dependence on Russian energy, which is not conducive to the global energy transition and carbon neutrality process
.
However, from the perspective of the overall trend, the global response to climate change and the acceleration of the energy transition is an irreversible trend, and Europe will not "change course"
.

In fact, the European Commission has raised the renewable energy share target to 45% by 2030, and the renewable energy development plans of some EU countries are more aggressive, among which the German cabinet has passed a package of bills to increase the capacity of onshore wind power and photovoltaic power generation by about 3 times, and the proportion of renewable energy will reach 100% by 2035, which is 5 years
earlier than the "100% green power supply" plan previously formulated by Germany 。 Austria, Belgium, Lithuania, Luxembourg and Spain have also jointly recommended that the European Union increase its installed capacity by at least 1 gigawatts of photovoltaic power by 2030 and build at least 70 million solar roofs
by the end of this century.

However, it is easier said than done, and Europe's renewable energy "ambitions" will face many tests, and whether it can leverage renewable energy to achieve energy independence as scheduled still needs to be a big question mark
.

"The renewable energy development plan developed in Europe is quite radical, there are no small difficulties in implementation, and it will take a long time
.
Because renewable energy generation is still unstable, and fossil energy still accounts for 84% of global energy consumption, coal consumption has also shown an upward trend
in recent years.
Until a breakthrough in large-scale energy storage technology, fossil energy will remain the main force
of energy supply.
Wang Nengquan pointed out
in an analysis.

But there are also views that Europe's energy crisis will accelerate its energy transition, such as Italy, a member of the European Union, which quickly approved six wind farms
with a total installed capacity of more than 400,000 kilowatts after the Russian-Ukrainian conflict.
"The clean energy development plan formulated by European countries has strong goal and guiding significance, and will attract more funds to invest in low-carbon clean energy in the future, promote the progress and development of clean and low-carbon technology, especially contribute to the breakthrough
of energy storage technology.
" Liu Manping, senior economist at the Price Monitoring Center of the National Development and Reform Commission, believes that "some European countries have the ability to achieve their own renewable energy development plans
.
" ”

Another expert believes that through this "service", looking at the world, the process of carbon emission reduction may change
.

"In the short term, Europe's restart of coal power is undoubtedly a departure from
the global 'double carbon' process.
In the long run, Europe's measures to develop renewable energy will indeed promote carbon emission reductions in
Europe.
However, after the 'baptism' of this conflict, Russia, which has suffered a series of sanctions from Western countries, may also choose to deviate from the existing rules and order, and no longer recognize the 'carbon order' built by the European Union, and there is great uncertainty in
its future carbon reduction actions.
This means that the global energy transition and carbon reduction will face greater challenges
.
Liu Guizhou pointed out
.