As the mounting crisis between Russia-Ukraine forced several Western nations to impose sweeping penalties on Moscow, gas-producing nations in the Middle East have remained incredibly worried about sourcing replacement gas supplies if the sanctions affect Europe.
Addressing the two-day Qatar Gas Summit held in Doha, Qatari Emir Sheikh Tamim bin Hamad Al Thani said that 11-nation Gas Exporting Countries (GECF) are striving to preserve balance in the world markets as they continue to buoy amid fear of potential Moscow-Kyiv conflict.
Noting the expanding Russian troop amassment at Ukraine borders in the past months, the US had earlier asked Qatar to help Europe by stocking emergency supplies in case of further deterioration. However, the gas-producing counties informed that there will be a considerable drop in substantial amounts of replacement gas if sanctions on Russia physically impact Europe.
Meanwhile, Qatar and other Middle-East countries have also insisted on significant investment in gas infrastructure and stressed for certain long-term contracts to guarantee a prolonged gas supply to Europe.
Why will Russian sanctions impact gas supplies in Europe?
Currently, Russia accounts for nearly 40% of natural gas supplies to Europe. In addition, the developing Nord Stream II Gas pipeline connecting Europe and Russia via the Baltic Sea was also supposed to increase supplies to Europe. However, Russian President Vladimir Putin signing a decree to recognise the independence of two breakaway regions of Ukraine-Donetsk and Luhansk, forced German Chancellor Olaf Scholz to stall operating license to the key Russian pipeline until further notice, which was met with quite a “surprise” by many, BBC reported.
Gas exporters at GECF call for dialogue to resolve global gas supply issue
At the GECF, Qatar on Wednesday asserted that it is “working hard to ensure a credible and reliable supply of natural gas to the world markets and preserve stability”. Emir Al Thani also backed calls for further dialogues between importers and exporters to ensure stability and security in gas supply across the globe.
“To further promote our role in the production of natural gas, we are endeavouring towards increasing our LNG production capacity from 77 million tonnes yearly to 126 million tonnes yearly by 2027,” Emir Sheikh Tamim bin Hamad Al Thani said at the Qatar Gas Summit.
Meanwhile, UAE energy minister Suhail al-Mazrouei stated that the recent spike in oil prices was driven by geopolitics. “It is not an issue of supply and demand this is an issue of geopolitics,” he said. On the other hand, Iraq oil minister Ihsan Abdul-Jabbar Ismail said that his country shifted investment priority from the oil sector to gas to preserve the stability of the market and increased production of liquefied petroleum gas and distillates.
Urkraine-Russia crisis
On Wednesday, Japan became the fifth country AFTER the US, UK, Canada, Germany and Australia to impose sanctions on Russia. On the other hand, New Zealand’s government summoned Russian Ambassador Georgii Zuev to meet with top diplomatic officials on Wednesday, who are urging Russia to return to diplomatic negotiations over Ukraine.
The developments come as the West is invested to make last-ditch efforts to fend off Russian aggression against Kyiv. However, despite crippling penalties, Russia has continued to ramp up its troops and weapons deployment in the rebel-held territories of Donetsk and Luhansk, despite several calls for de-escalation.