How will Russia’s assault on Ukraine affect UK gas supplies?
With Vladimir Putin’s invasion of Ukraine under way, the Kremlin’s grip on the gas taps and pipelines that supply heat and electricity to millions of homes and businesses in Europe is all too apparent.
Gas is already in tight supply globally and has reached record market price highs in recent months.
In the UK, this has triggered a full-blown energy crisis, including the collapse of multiple electricity suppliers and a rise in household gas and electricity bills that has contributed to a growing cost-of-living squeeze.
As Russia began its assault on Ukraine, prices surged again. The UK benchmark was up 32% to 281p per therm on Thursday, while the closely watched Dutch future gained 31% on contracts for March delivery. So, could Europe’s energy crisis become a catastrophe?
“We must collectively cease the dependence on Russian oil and gas that for too long has given Putin his grip on western politics,” Boris Johnson said on Thursday.
The good news, for the UK’s security of supply at least, is that less than 5% of our gas comes from Russian imports. About half comes from vast, though rapidly dwindling, North Sea reserves. Another third is sourced from Norway, while the rest comes in via pipelines connecting the UK to Europe, or in the form of liquefied natural gas (LNG), which is transported by tankers typically from Qatar or the US. All of this means, according to a report by the Oxford Institute of Energy Studies, that Britain is “unlikely to face a physical shortage of supplies”.
The bad news is that Russia typically supplies 30-40% of Europe’s gas, meaning it still wields huge influence over prices, which are already eye-wateringly high. The UK’s market is closely connected to markets in Europe, so a price rise in Germany or
Read more on theguardian.com
