Page 4 - FSUOGM Week 10 2023

FSUOGM COMMENTARY FSUOGM

Wood Mackenzie weighs

up Russia-Ukraine war's

impact on energy

The consultancy looks at the broader implications of the war on

energy markets beyond the current supply crunch.

GLOBAL THE Russia-Ukraine war means energy security and Asia and pulled what supply was available
will no longer be taken for granted, has shown into the European market – limited volumes of
WHAT: that Europe can handle a future without Rus- alternative piped gas and every cargo of flexible
The Russia-Ukraine sian gas, demonstrated the resilience of oil and LNG from around the globe,” it says.
war has had a profound coal and the limitations of the power markets, Confidence is growing that Europe can make
impact on energy and should help fast-track the energy transition, it through the next three years, despite high and
markets. Wood Mackenzie said in a blog post on Febru- volatile prices. Europe managed to last through
ary 23. Some have fared better in the crisis and this winter – which was set to be the biggest
WHY: others worse, the Edinburgh-based consultancy test – thanks to unseasonably mild weather and
Among the implications, notes. ample LNG supply. But the next wave of new
countries will no longer “No country can ever again allow itself to LNG supply, primarily from the US and Qatar, is
take energy security for become reliant on imported energy from a sin- only expected to arrive in 2025, bringing prices
granted. gle supplier,” WoodMac said. “In future, energy back to normal. The growth potential for LNG
security will be about the diversity of fuels and demand remains in Asia in the longer term,
WHAT NEXT: sources, and the primacy of domestic resources.” according to WoodMac.
It could end up being The war has pushed energy importers to do “The war, though, has fundamentally
a boon for the energy more to diversify their fuels and sources, and changed the market forever – it’s now a more
transition. place more priority on domestic supply, it said. global market, flexible and fungible, but likely
WoodMac also notes that the global energy more volatile as Europe competes with Asia for
market has adapted “remarkably quickly.” the same LNG cargoes,” Woodmac says. “Could
“High prices dampened demand in Europe Europe buy Russian gas again in the future?

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