The leaders of the 27 countries of the European Union agreed last week on sanctions with “massive and severe” consequences for Russia, after the Russian military offensive in Ukraine. According to calculations by the Kiel Institute of World Economy, the energy embargo, especially natural gas, would be the sanction with the greatest impact on the Russian economy. But how Russia currently supplies around 40% of the gas imported by the EU, what alternatives could Europe turn to if the Russian tap were to be closed?
Nowadays, Almost 75% of Europe’s (EU-27 and UK) natural gas supply is transported by pipeline, according the United States Energy Information Administration. In addition to Russia, Norway and Algeria also export significant volumes through gas pipelines to Europe, but these countries do not have much additional production capacity.
Therefore, the EU is looking instead for suppliers of liquefied natural gas, which can be shipped from all over the world. As our graph shows, the main exporting countries of liquefied natural gas are Australia, Qatar and the United States. At the end of January, the US administration already indicated that it was working on “alternative supplies to cover a significant majority of possible cuts” in Russian supply.
