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Russian invasion of Ukraine stifles global energy supply

Photo used with permission from Alexandra Road by Eric Jones/Wikimedia Commons
Pipelines in Ireland export oil as they prepare to undergo distillation and other production-related processes in their respective refineries. Following the breakout of Russia’s invasion of Ukraine, Russia’s Russia’s energy exports were sanctioned which caused a spur in global energy demands.

Russia’s invasion of Ukraine has implicated Russia’s high-scale energy exportations given sanctions by the country’s main consumers, per The Financial Times.

Chris Bake, who is a parent at the school and Head of Origination at commodity trading company Vitol, said sanctions on Russia have significantly shifted the dynamic of the energy industry.

“The effects of the invasion and the consequence of the consequential sanctions that were imposed on Russia and the reciprocal curtailment of gas by Russia to Europe, for geopolitical reasons, is having a profound effect on industry and power generation in Europe,” he said.

Russia and Ukraine tensions

The Russia-Ukraine conflict escalated Dec. 21, 2021, when Russia’s foreign ministry established multiple commands to the North Atlantic Treaty Organization (NATO), an intergovernmental military alliance between 30 member states, according to The New York Times.

To abstain Ukraine from joining NATO and neutralize Ukrainian military efforts, Russian President Vladimir Putin announced Russia’s invasion of Ukraine Feb. 24, according to The New Yorker.

Bake said he suspected tensions would rise following the annexation of Crimea in 2014. Still, Bake said that Russian forces surpassed his expectations in terms of how far into Ukraine they invaded. 

“Post Crimea, there was a crisis brewing, but I for one never believed Russia would actually invade beyond the Donbass-Luhansk region of Ukraine,” he said.

Post Crimea, there was a crisis brewing, but I for one never believed Russia would actually invade beyond the Donbass-Luhansk region of Ukraine.

— Vitol Head of Origination Chris Bake

Impact of sanctions 

According to the European Investment Bank, the Russian invasion caused a large-scale humanitarian crisis. The conflict and resulting sanctions disrupted exports from Russia for commodities such as metals, food, oil and gas, leading to unprecedented levels of demand.

Bassel Ojjeh (’25) said he worries about the resulting effects of increasing pricing on those with difficult financial circumstances.

“The situation is tough for many people living in the U.K. and around Europe as we are witnessing a massive increase in inflation prices across this region,” he said.

Ojjeh said oil and gas are necessary commodities and repercussions are bound to be present as a result of prices rising.

“We are talking about necessary items that people need on a regular basis,” he said. “Honestly, there is no going without saying that from a financial perspective, the U.K. will deal with these added costs.”

Similarly, Johannes van Zuydam (’23) said the knock-on ramifications of increasing prices is observable, with the inflation rate reaching up to 13.2% in the U.K, according to the Office for National Statistics.

“It’s simply unrealistic to think that salaries will be adjusted to that level in such a short period of time,” he said. “This situation is destined to have long-lasting negative effects.”  

Monetary implications

Social Studies Teacher Duncan Pringle, who teaches AP Economics, said the crisis has impacted the value of the British Sterling. Pringle said tax cuts of billions of pounds of emergency relief poured into the energy sector. As a result, the value of the pound has plummeted and is currently $1.13 against the pound, according to Xe Currency Converter

Pringle said the lower value of the pound will “further fuel inflation because imports will become more expensive.”

Bake said each country’s level of dependency on Russian gas from Russia varies.

“The amount of gas coming from Russia is part of the total European balance,” he said.

In addition, Pringle said although the U.K. is less dependent on Russia for energy supply, there are still implications due to the standard market price of such commodities.

“Although the U.K. is less susceptible to disruptions in the Russian gas supply chain than other countries in Europe, we still buy our gas at the market price of the world,” he said.

Further, Pringle said the U.K. must deal with the effects of higher prices internationally which subsequently causes them to take on additional debt. This added debt negatively impacts the U.K. when they borrow money due to an increase in interest rates. 

“The U.K. government’s ability to borrow money as a result of the markets didn’t look very favorable on measures they announced,” he said. “There is also an additional amount of debt being taken and the interest payments on that debt are going to become more expensive. It seems as if the markets are losing confidence in the British government’s ability to repay owed money.”

Gas is priced against a benchmark called Title Transfer Facility (TTF), a clearing point based in the Netherlands that determines the gas price. Following the crisis, there was a clear impact on the pricing of gas as it rose exponentially, according to Euro News.

Pringle also said the rising cost of gas will greatly impact individuals, especially given the current severity of inflation.

“It comes at a really bad time when inflation is already spiraling,” he said. “Energy bills are through the roof, having a huge impact on people, obviously, particularly in poor sections of society.


Since the invasion, Liquefied Natural Gas (LNG) is the primary source of gas in the U.K. following the decrease in Russian supply via pipelines, per Shell

Bake said the current supply situation in the U.K. is looking relatively positive, with the main concern being whether the country can maintain a sustainable energy source without any reliance on Russia.

“The U.K., up until recently, was self-sufficient gas because it had multi-production,” he said. “Now, its gas balances are maintained because it has incremental LNG supply and LNG storage in the U.K., and it has the pipeline connection to Europe. But, the issue is whether the U.K. can continue to flow gas to Europe through the winter or not, depending on its own supply.”

Van Zuydam said countries are progressing in their efforts of establishing a more renewable energy system to propel sustainability goals. Currently, he said LNG would be a viable alternative for Russian pipeline supplies.  

“LNG is a very possible alternative in the meantime as we shift towards renewable sources, especially when considering the fact that Russian exportation has taken a hit,” he said.

“LNG is a very possible alternative in the meantime as we shift towards renewable sources, especially when considering the fact that Russian exportation has taken a hit.”

— Johannes van Zuydam (’23)

Bake said the crisis has sparked an unprecedented demand for LNG by countries looking to lessen their dependence on Russia.

“There is a huge move to try and supplement pipeline gas from Russia with LNG, which will put stress on LNG demand in Asia,” he said. “Because pipeline gas from Russia currently playing west can’t go east and the west is going to, there’s going to be a price competition between the West and Asia to buy incremental LNG.”

However, according to the European Gas Hub, the LNG and other alternatives are not as straightforward as regular pipeline exportation, and the process is more expensive.

Bake said he has noticed a desire for LNG projects in the attempts of finding alternatives to Russia’s pipeline exportation.

“We’ve seen at least five additional projects table this year, two potential in Holland, two in Germany and wanting in the Mediterranean between Italy and for France,” he said. “So, there is a huge move to try and supplement pipeline gas from Russia with LNG.” 

Ojjeh said the magnitude of the invasion cannot be measured due to wider uncertainty around impact and the conflict’s  end.

“There’s no way for us to know how badly this invasion will affect the rest of the world,” he said. “For now, we can see what has happened with the global shortage in Russian supplies because of sanctions but we don’t know how long this will go on for and to what extent we’ll be needing to deal with these impacts.”

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About the Contributor
Nassef Sawiris, Lead Sports Editor
Nassef Sawiris (’25) is the Lead Sports Editor for The Standard, and this is his third year in the publication. Sawiris began his journalism career 5 years ago on the Middle School newspaper, The Scroll. His love for writing covers various topics with the common goal of arguing his opinion and educating the community on issues he feels passionate about. He continues to actively participate in other extracurricular activities such as his role on the varsity soccer team along with his leadership position in the Investment Club.

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