October 5, 2022
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How reliant is the world on Russia for oil and gas?

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By Jake Horton, Daniele Palumbo & Tim Bowler
BBC Reality Check

Image source, Getty Images
Image caption,

Energy costs have risen since Russia’s invasion of Ukraine

The European Union plans to ban all purchases of Russian oil by the end of the year.

But there is no consensus yet among EU members on stopping imports of Russian gas.

What oil and gas sanctions are there?

European Commission President Ursula von der Leyen has announced that EU countries have been banned from buying Russian oil after the end of 2022.

The EU has imported about €22bn ($23bn) of fossil fuels per month from Russia since the start of the war as oil and gas prices have soared, compared with an average of about €12bn ($12.5bn) a month in 2021.

How much oil does Russia export?

Russia is the world’s third biggest producer, after the US and Saudi Arabia.

In 2020, the Netherlands and Germany imported the most Russian oil per day.

What are the alternatives to Russian oil?

Research analyst Ben McWilliams says it should be easier to find alternative suppliers for oil than for gas, because while some comes from Russia, “there’s also a lot of shipments from elsewhere”.

Some countries, members of the IEA, have released the equivalent of 120 million barrels from oil stocks – the largest release of reserves in its history.

The US also wants Saudi Arabia to increase its oil production and is looking at relaxing sanctions on Venezuela’s oil.

How has Russia halted gas flows?

Despite the invasion of Ukraine, Russia has continued to supply a large amount of gas to many European countries.

Image source, AFP

However, after Western powers placed financial sanctions on Russia, President Putin announced that “unfriendly” countries would have to pay for gas in the Russian currency.

The EU has said it considers Russia’s action to be a form of blackmail.

Many other EU countries are set to face the same issue around mid-May when payments are due.

Payments in roubles would shore up the Russian currency and benefit its economy.

Who’s paying in roubles?

Ms Von der Leyen warned that complying with Russian demands would breach EU sanctions and would be “high risk” for companies that did so.

Gas companies in some EU countries, including Germany, Hungary and Slovakia, have agreed to pay for gas in euros through Russian bank Gazprombank, which will then convert the payments into roubles.

The EU said last week that if buyers of Russian gas could complete payments in euros and get confirmation of this before any conversion into roubles took place, that would not breach sanctions.

How much gas does Russia supply to Europe?

Russia only provides about 5% of the UK’s gas supplies, and the US does not import any Russian gas.

Russia sends gas to Europe through several main pipelines. The gas is collected in regional storage hubs, and then distributed across the continent.

What about alternatives to Russian gas?

Europe could turn to existing gas exporters such Qatar, Algeria or Nigeria, but there are practical obstacles to expanding production quickly.

The US has agreed to ship an additional 15 billion cubic metres of liquified natural gas (LNG) to Europe by the end of this year.

Europe could also increase its use of other energy sources such as wind power, but doing so is not quick or easy.

Image source, Getty Images
Image caption,

The EU hopes to massively boost its use of renewable energy, including wind power

What will happen to my heating and fuel bills?

Consumers will face rising energy and fuel bills. Heating prices – already high – are likely to increase even more if Russia restricts gas exports to Europe.

In the UK, household energy bills have been kept in check by an energy price cap.

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