Europe has undergone many mishaps in the recent past. Yet to recover from the consequences posed by the pandemic, Europe plunges into another phase of difficult times which is characterised by price hikes, low industrial production and what not. With the Russia-Ukraine war still at its full swing, it has unleashed many problems than expected having a wide range of implications nationally and internationally. The embargo against Russia by the EU, the UK and led by the US has proven to be a pit for the EU bloc itself.
Before Russia invaded Ukraine, Russia met 40% of the EU’s Natural Gas needs with Nord Stream 1 pipeline, an underwater pipeline passing through the Baltic Sea to Germany, carrying 35% of the whole Natural Gas supply to EU states. During the crisis, a series of strategic moves took place including US sanctions on Russian banks and products, but it didn’t include oil and gas, because if there would be sanctions on Russian oil and gas, it will be a stab in the back of the EU countries itself due to their dependency on the Russian energy resources.
But by 2023, Washington aims to sanction oil and gas products of Moscow as well which, at the current global scenario of energy shortages, seems impossible. The US is of the view that by sanctioning Russian oil and gas in future, it can hit their economy adversely because this Russian export makes a huge 40% of Russian export revenues. Moscow on the other hand is searching for new profitable importers of its oil and gas.
In reply to the Russian trade embargo by EU, Russia has already cut off its supplies to the EU countries from 40 to 9%, which unleashed a cycle of catastrophic events including price hikes and low industrial production. Russia has shifted its exports from the West to the subcontinent, mainly India, and is hopeful for a swift and successful change of venue for it exports from the West to its South. This is only a sub event of what has yet occurred post Russia-Ukraine war in Europe.
Pakistan is an import driven country. According to the Trade Development Authority of Pakistan, 56% of its oil and gas is imported from Saudi Arabia, while 34% from UAE and none from Russia. With this being stated, it seems that the Russia-Ukraine war would have no adverse effects on Pakistan, but there is a twist in the tail. As Russia has cut down the supplies to EU countries, the EU states and UK acted fast to adapt to the situation.
In a statement, Commission president Ursula von der Leyen said: “We must become independent from Russian oil, coal and gas…we need to act now to mitigate the impact of rising energy prices, diversify our gas supply for next winter and accelerate the clean energy transition.”
The EU states are planning to get independent of the natural gas and oils as form of energy and move to a greener and environmentalfriendly resource. To aid this, the imports of LNG from countries like Qatar to EU has increased by more than 100% as compared to last year, demonstrating to the EU countries to rely more on alternatives of the energy resources supplied by Russia. Europe is also finding more importer countries other than Russia to meet its needs. With the increase in demand in the energy resources following the invasion of Ukraine, the countries supplying the gas and oil to Pakistan like Saudia Arab, deals with Europe, and thus increasing its supply to Europe at the stake of Pakistan’s need, it will unleash a cycle of catastrophic events in Pakistan.
Winters are approaching and hence, a more increase in demand of energy supply is certain. Pakistan has recently spoken to Moscow about an energy deal which can open a new prospect of cheap oil and gas supply, but it is yet to be executed and can take years. It is necessary for Islamabad to take care of its energy needs by not only exploring the countries that provide good deal at low costs, but also exploring its own reservoirs and even try more greener resources of energy in the wake of Global Warming that can supplement the government in tackling not only the energy shortages that has yet to ensue at larger scales, but also the natural calamities that can be prevented by such discoveries.