The role of natural gas in the conflict between Russia and Ukraine

One of several commodities impacted by Russia's invasion of Ukraine is natural gas.

The price of natural gas on the Dutch TTF hub, a European benchmark, increased more than three times between February 16 and March 7 before decreasing.

Despite being at the center of the largest military conflict in Europe since World War II, Russia's natural gas still flows through Ukraine to the rest of the continent.

According to IHS Markit energy analyst Laurent Ruseckas, if one is not knowledgeable about European gas, they may believe there is a war and invasion occurring, with gas flowing freely as if nothing is happening. However, Russia has recently taken a different approach with European gas.

Approximately 40% of the European Union's natural gas comes from Russian pipelines, with a quarter of that flowing through Ukraine. Germany receives roughly half of its natural gas from Russia.

Georg Zachmann, a senior fellow at Bruegel, stated that the Russians are earning a substantial amount of money daily by selling gas to Germany and Europe. In contrast, the Europeans are heavily reliant on Russian gas to replenish their storage facilities.

Germany halted its involvement in the Nord Stream 2 pipeline, a 760-mile long underwater connection between Russia and Germany's coast, while the EU declared plans to decrease its reliance on Russian gas by two-thirds and achieve energy independence from Russian fossil fuels by 2030.

Economic sanctions were imposed on Russia by the U.S. and its partners, targeting its financial institutions and elites.

What is the role of natural gas in the conflict with Ukraine and how are Europe and the U.S. affected? Watch the video for more information.

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