Crude oil, natural gas prices shocking! How big is the impact of the Russian-Ukrainian conflict on global energy?

On February 24, local time, the situation in Ukraine deteriorated sharply, and people in many places lined up in front of ATMs to withdraw cash
.
The picture shows the citizens of Lviv, Ukraine, withdrawing money
in front of the ATM.

Affected by the Russian-Ukrainian conflict, the price of international crude oil futures continued to fluctuate, breaking the $100 per barrel mark
many times.

On February 25, Beijing time, London Brent crude oil futures peaked at $102.
23 per barrel, and as of press time, it fell back to $
96.
57 per barrel.

At the same time, European gas futures prices continue to fluctuate
.
European gas benchmark futures prices rose
for four consecutive days.
On February 24, the Dutch TTF natural gas futures price rose more than 60% at the end of the day, and closed up 33.
3%.

However, on February 25, as of press time, Dutch natural gas futures prices fell by 25%.

Why does the Russian-Ukrainian conflict have such a big impact on the crude oil and natural gas markets?

Russian Energy Minister Nikolai Shulginov estimates that in 2021, Russian oil production will reach 517 million tons
.
According to the US Oil and Gas Journal (OGJ) statistics, global oil production in 2021 is about 4.
423 billion tons, and Russian crude oil production accounts for about 11.
69%
of the world.

In addition, data from British Petroleum (BP) shows that in 2021, Russian natural gas production will be about 639 billion cubic meters, global natural gas production will be about 3.
854 trillion cubic meters, and Russian natural gas production will account for about 16.
58%
of the world.

Zhou Dadi, executive vice president of the China Energy Research Association and former director of the Energy Research Institute of the National Development and Reform Commission, told Zhongxin Finance and Economics that at present, changes in the international situation have led to changes in oil prices, and geopolitical conflicts have boosted oil prices
.

In the context of the COVID-19 pandemic, demand for transportation oil has declined due to production disruptions
.
At the same time, winter has passed, and the supply pressure of crude oil and natural gas, which is dominated by heating demand, continues to decrease
.
Therefore, he believes that the current oil and gas prices are mainly affected by the situation and do not reflect the changes in actual supply and demand, and it is difficult to sustain
fluctuations.

Zhou Da said that the Russian-Ukrainian conflict has led to increased uncertainty about Russian oil and gas exports to Europe, affecting market futures prices
.
However, in the progress of Iranian nuclear negotiations, after reaching an agreement, Iran will increase oil production capacity, and the actual supply of global oil will be further improved
.

In the view of experts, the United States is also a major oil and gas producer, after the Russian-Ukrainian conflict, Europe and Russia relations are tense, the United States will increase the supply of oil and gas to
Europe.
However, due to the large gap, it is temporarily difficult for Europe to find an alternative to Russian energy suppliers
in the international market.

On February 21, the Russian oil and gas network cited statistics released by European gas infrastructure to say that as of February 17, the vacancy rate of underground natural gas storage (UGS) facilities in Europe reached 95.
3%.

"Europe's dependence on Russian gas is high, with a share of nearly half, and the share of oil is also close to a quarter
.
" Zhao Hongtu, an expert on energy issues at the China Institute of Contemporary International Relations, said in an interview with reporters that even if a lot of preparations are made, the amount is too large, and no party in the international market has such a large surplus capacity to make up for it
.

"Now Europe can't find a complete alternative to Russia in terms of energy, although the rhetoric has been shouting about energy diversification
.
" If the conflict continues, not only will oil prices rise, but the problem of natural gas shortages will certainly increase
.
Zhao Hongtu added
.