Gas supplies to Europe will more likely be deranged because of the violence in the region, rather than as a result of being weaponized, Dan Yergin told CNBC on Tuesday.
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President of Russia Vladimir Putin will have to pay the price if he weaponizes the gas supplies to Europe and Russia-Ukraine tensions rise, as per the statement stated by energy expert Dan Yergin.
As such, the more likely scenario is that the gas supplies can be disrupted because of violence in that particular region, rather than as a result of being weaponized. He gave this statement to CNBC’s “Squawk Box Asia” on Tuesday.
According to Yergin, who is vice chairman of IHS Market, ” So [Putin] could weaponize it on a broader sense and then Europe would have to scramble, but it will be deeply damaging to his future market for natural gas if he were to do it. I think more likely would be disruptions that occur because of violence in the region combined with the sanctions.”
Russia also provides more than 30% of Europe’s natural gas and Europe’s markets are connected by a network of pipelines, some of which also pass through Ukraine. Yergin warned last month also that the Russia-Ukraine crisis is a stick out on the market of grass.
The Kremlin has used energy as a tool to exert political pressure before also. It cut off Ukraine’s gas supply due to debate in 2006 and again in 2014 after it annexed Crimea. In 2009, Russia again cut off all the gas supplies. It was this time to Europe through Ukraine.
The tension between Russia and Ukraine increased in recent times as Russia built up around 100,000 troops along its border with Ukraine. It sparked problems that Russia may be preparing to invade the country and set off fears of a repeat of the Kremlin’s illegal annexation and occupation of Crimea in 2014. Moscow has repeatedly contradicted those statements.
Any confrontation has the power to destabilize the whole region given Ukraine’s location separating Russia and the EU. The crisis has sparked talk that the U.S. could impose sanctions on Russia to stop the Kremlin from invading Ukraine.
According to Yergin,” There’s a lot of nervousness” in the oil market. Prices have climbed on tight supply, but are also gaining support from the Russia-Ukraine tensions. Crude prices shot up to above $90 per barrel recently, representing a growth of nearly 20% this year and running of more than 60% since the beginning of 2021.
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