Europe has undergone many mishaps in the recent past. Starting with the panademic, followed by price hikes, low industrial production, and the Russia-Ukraine war, it is currently facing many problems with a wide range of implications, nationally as well as internationally.
The embargo against Russia by the EU, UK and US is proving to be a pit for the EU bloc.
Before Russia invaded Ukraine, Russia supplied the EU by 40 percent of their natural gas needs with Nord Stream 1 pipeline, an underwater pipeline passing through the Baltic Sea to Germany, carrying 35 percent of the whole natural gas supply to the EU states. During the crisis, a series of strategic were made, including the US sanctions on Russian banks and products, but it didn’t include oil and gas — because of their dependence on Russian energy resources.
By 2023, Washington aims to sanction oil and gas products of Moscow as well which, at the current global scenario of energy shortages, seems impossible. The US is of the view that by sanctioning Russian oil and gas in future, it can hit their economy adversely because Russian oil export makes for a huge 40 percent of Russian export revenues. Moscow on the other hand is searching for new profitable importers of its oil and gas.
In reply to the trade embargo by the EU, Russia has already cut off its supplies to the EU countries from 40 percent, which is the pre-invasion quantity, to 9 percent, which unleashed a cycle of catastrophic events, including price hikes and low industrial productions.
Russia has shifted its exports from the West to the Subcontinent, mainly India, and is hopeful for a swift and successful change of venue for it exports from the West to South. This is only a sub-event of what has occurred post-Russia-Ukraine war in Europe.
With the increase in demand in the energy resources, following the invasion of Ukraine, the countries supplying gas and oil to Pakistan, like Saudia Arabia, may increase its supply to Europe, irrespective of Pakistan’s needs and demands. This may unleash a cycle of catastrophic events in Pakistan.
Pakistan is an import driven country. According to the Trade Development Authority of Pakistan, 56 percent of its oil and gas is imported from Saudi Arabia, while 34 percent from the UAE and none from Russia.
It seems that the Russia-Ukraine war would have no adverse effects on Pakistan. But there is a twist in the tail. As Russia has cut down supplies to the EU countries, the EU and UK acted fast to adapt to the situation. In a statement, Commission president Ursula von der Leyen said: “We must become independent from Russian oil, coal and gas … we need to act now to mitigate the impact of rising energy prices, diversify our gas supply for next winter and accelerate the clean energy transition.”
The EU states are planning to get independent of the natural gas and oils as a form of energy and move to a greener and environment-friendly resource. To aid this, the imports of LNG from countries like Qatar to the EU has increased by more than 100 percent as compared to last year, demonstrating the EU countries would be relying more on alternatives of the energy resources supplied by Russia. Europe is also finding more importer countries other than Russia to meet its needs.
With the increase in demand in the energy resources, following the invasion of Ukraine, the countries supplying gas and oil to Pakistan, like Saudia Arabia, may increase its supply to Europe, irrespective of Pakistan’s needs and demands. This may unleash a cycle of catastrophic events in Pakistan.
Winters are approaching. An increase in demand of energy supply is certain. Pakistan has recently spoken to Russia about an energy deal which can open a new prospect of cheap oil and gas supply, but it may take years to be executed. It is necessary for Islamabad to take care of its energy needs by not only exploring countries that provide good deal at low costs, but also explore its own reservoirs and even try more greener resources of energy in the wake of global warming — that can facilitate the government in tackling not only the energy shortages that has yet to ensue at larger scales, but also the natural calamities that can be prevented by such discoveries.
