Think Tank

The dilemma of European energy strategy autonomy

2024-03-28   

In the two years since the escalation of the Ukraine crisis, Europe has followed the United States in imposing embargoes or price limits on Russian oil products and natural gas, attempting to break free from dependence on Russian energy and promote the development of its own renewable energy, in order to establish a European energy independence strategy. However, the separation of oil and gas between Russia and Europe allowed the United States to export high priced natural gas to Europe, becoming the world's largest exporter of liquefied natural gas and the biggest winner. Europe's "Brexit from Russia" in the energy sector has triggered a significant backlash effect, leading to a high dependence on American liquefied natural gas and suffering from the "oil and gas premium". Multiple countries are experiencing energy supply shortages, intensified inflation, and impacts on people's livelihoods. On March 25, 2022, the United States and the European Union issued a joint statement announcing strategic cooperation in energy security and reducing dependence on fossil fuels. The United States has promised to provide 15 billion cubic meters of liquefied natural gas to the European Union by 2022, and will continue to increase its supply in the future, ending the EU's dependence on Russian fossil fuels by 2027. As of the end of 2022, the United States has become the largest crude oil supplier to the European Union, with 18% of the EU's imported crude oil coming from the United States. For the first time, the US exports of liquefied natural gas to Europe have surpassed Russia's pipeline gas exports to Europe. According to a 2022 report by a US business insider website, US energy companies can fill a liquefied natural gas carrier for only $60 million, while the acquisition price in Europe is as high as $275 million. Excluding transportation and other costs, each ship can earn over 150 million US dollars. According to an article in the French newspaper Le Monde, the United States is trying to profit from the long-term crisis in Ukraine, while Europe spends an average of billions of dollars per month importing liquefied natural gas. In addition, European countries have followed the "boomerang" of the US sanctions against Russia to accurately strike back at the West, and the backlash effect of the sanctions has caused heavy losses to Europe. The implementation of an embargo or price limit on Russian natural gas and oil products has hindered the supply chain of industries such as energy, comprehensively pushing up prices in various European countries and putting pressure on people's lives. In the fourth quarter of 2022, the number of companies applying for bankruptcy in the European Union rose to the highest level in 8 years. "The worst impact of the energy crisis may have passed, but we do not have the capital to be complacent," the European Commission wrote in its "Energy Union National Report 2023" submitted on October 24, 2023. The report believes that in the long run, the EU needs to ensure reliable and affordable energy supply to ensure the competitiveness of EU countries' industries and economies globally. The European Commission recently released a report stating that despite the overall trend being positive, the European energy market remains fragile. The International Energy Agency is concerned that the possibility of significant fluctuations in natural gas prices in Europe is increasing. The European Commission released a winter economic forecast report in February, which lowered the economic growth rates of the EU and Eurozone in 2023 from the autumn forecast of 0.6% to 0.5%, and lowered the EU economic growth forecast for 2024 from 1.3% to 0.9%, and the Eurozone economic growth forecast from 1.2% to 0.8%. Germany, the largest economy in Europe, used to rely on importing natural gas from Russia and had to bear the cost of rising energy prices in the search for new energy supplies

Edit:GuoGuo Responsible editor:FangZhiYou

Source:news.cn

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