15 June, 2022
Russia accounts for nearly 38% of the total European energy consumption. The Russia-Ukraine war has disrupted supply to European nations like Poland and Bulgaria, and the European energy market in a holistic manner. The impact on global trade has been negative and has led to inflationary trends, and supply disruption as shippers tend to divert supply to the highest bidders.
RALEIGH, N.C – Jun 15, 2022: Russia accounts for 38% of gas imports across the European continent. Disruptions in supply from the Russian standpoint can impact the East European countries, Austria, Finland, Poland, Bulgaria, Italy, Czech Republic, Germany, and some other nations immensely. Supply disruption has accounted for the diversion of gas supply to the highest bidders in the shipping space. Europe remains highly dependent on Russia for their energy requirements, and supply disruption has impacted logistic costs that have led to global inflationary trends.
Western and Southern Europe have high reserves of gas, but LNG reserves remain highly underutilized due to reliance on Russian gas exports to Europe to serve energy requirements in most European nations. Global LNG demand also remains highly strained. Russia has imposed sanctions regarding Ruble payments recently, which has further strained the energy dynamics of Europe.
A Beroe spokesperson has been vocal about the dire situation. “Eastern European nations like Germany, Austria, Poland, and Italy remain highly vulnerable to supply disruptions from Russia. The ramifications of the disruption will be felt not only in these regions but in other markets on a global level. The recent sanctions by Russia on payments in Rubles have already affected nations like Bulgaria and Poland. Over-dependence on Russia for energy requirements has made not only European markets vulnerable but had an impact on the European energy trading and entire global economy.”
“Clean energy guidelines, carbon footprint taxation, and other environmental concerns have made the European industry highly dependent on natural gas from Russia. Supply chain disruptions and shortages have created volatility and uncertainty in the markets, and has made global markets jittery,” the spokesperson said.
64% of the natural gas consumption in Europe comes from the industrial and power generation sector. The fertilizer and power generation industries are the major consumers of natural gas supplied by Russia. Both sectors have become highly vulnerable to price fluctuations due to disruptions in supply from Russia. Price fluctuations and shortages have become common since the Russia gas supply to Europe has become unstable. Stringent environmental laws have been the reason that steel manufacturing, food, petrochemicals, and other industries have shifted to natural gas as an energy source. The disruption in supply creates a stranglehold as it is not feasible to start reusing conventional energy sources like coal or oil.
The energy crisis in Europe has impacted global economics. Russian decision on payment in Rubles has sent shock waves in the global markets. The Norwegian gas fields have the distinction of being the largest producers of natural gas in the European continent. Currently, it is running at maximum capacity but has only been successful in catering to roughly 25% of the supply required. Energy supply disruptions have been instrumental in massive shortages and have impacted industrial output.
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