means that even if there are disruptions in
LNG output, it should not send gas prices through the roof.
, gas prices have risen by as much as 3.8
percent since the crisis began. Still,
they are at their lowest levels since 2010.
Brent crude fell by 2.3 percent, just below peak prices of 2010.
with 1/3 of all its LNG supply. Half of this moves through the Ukraine
. In the
past three years, other aspects of the Russian economy have slowed, making the
country increasingly dependent on revenue from oil and gas exports.
“This is basically a hydrocarbon version of Mutually Assured Destruction,”
says Seth Kleinman of Citigroup London. “Europe
Russian energy and Russia
Russian gas moving through the Ukraine
was interrupted back in 2006 and 2009, but in both those years winter
temperatures were colder than normal.
This time, Europe
is having its mildest winter in
7 years. Measurements show that
stockpiles are at 45 percent in Europe
as of March 13,
up from just 34 percent one year ago.
Bypassing the Ukraine
The Russian gas-pipeline company OAO Gazprom has already bypassed the Ukraine
with its Nord Stream. The pipeline moves
gas to Germany
by way of the Baltic Sea
and right now is only 30
“Since everybody expects the vote in favor of Russia
in that case the price impact should be limited,” says Carsten Fritsch, analyst
at Commerzbank AG. The exception would
be if “the EU imposes sanctions on the energy sector, which is rather
Normal Ukrainian flow
Even with backup options, so far the flow of natural gas
through the Ukraine
has not been disrupted. Last year,
Russian crude oil flowed through the Ukraine
at a rate of 300 mbopd. In act, that is
only about 1/10 of all the oil exported by Russia
exported 3.05 mmbopd to Europe
Even as the conflict continues in the Crimea
the benchmark European Brent crude moved down by 1.9 percent to $106.56. Prices initially surged at the beginning of
the conflict but now with no disruption in either natural gas or crude oil
having been reported, have settled back down.
Also from Brown
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