Sanctions on Russia
in War in Ukraine ·
Carl Lee27 said:The reality is that nowadays, the value of almost anything with a microchip in it—partially, or even primarily or exclusively—is measured by how well it connects to the internet. The whole world is slowly drifting toward this point where you can’t even dream of having a TV without Netflix, cars are gradually becoming connected devices, and even people themselves are getting networked through wearable health monitors, and eventually we'll have chips tracking all sorts of parameters inside the body, naturally being synced up with smartphones and hospitals.
Everything is becoming connected, integrated, and complementary to everything else. Except for Russia, obviously. ☕
I honestly don't know how far this goes; to me, it feels like they're going all the way. Athletes are being banned, vodka is being cut off, and they're shutting down collaborations with philharmonics and universities. It's total isolation.
Take the iPhone, specifically. What is it actually worth without Apple Pay? Without iCloud? Without Apple Maps? Or what happens if tomorrow YouTube, Facebook, Instagram, TikTok, and everyone else pull out or get kicked out of Russia?
The ultimate irony, of course, is that it would be much easier for me to get my hands on a rubber hose at Home Depot than it would be for ExxonMobil.
Actually, LNG should definitely be mentioned, because besides being the future of supply for Europe, more gas has been flowing into Europe via LNG for several months now than through Russian pipelines.
On the domestic front, gas consumption is slowly trending downward, both per capita and in total. Well, it's actually accelerating lately. However, production is also dropping, and it's falling even faster than consumption. Resistance to fracking means these trends will be really hard to reverse. So, beyond just finding a replacement for Russian gas, we also need to compensate for the decline in domestic production. Currently, production from the EU + UK + Turkey + Ukraine covers about 40% of their needs.
Chart 1, domestic production
https://i.ibb.co/BtFt59c/eu-gas-prod...pg-2808719.jpg
So, looking at everyone mentioned above, they’re going to need roughly 550 billion cubic meters of natural gas every single year. Now, out of that massive amount, Russia is currently supplying just under 200 billion cubic meters—which, if you do the math, is somewhere in the neighborhood of 32-36%.
Chart 2, gas sources in Europe
https://i.ibb.co/5TMTxhg/EU-gas.jpg
Honestly, trying to get enough from Norway, Algeria, or even Groningen to cover even a quarter of what we take from Russia? That’s going to be an incredibly tough hill to climb. There might be a glimmer of hope in those huge deposits over in the Eastern Mediterranean, specifically in that Israel-Egypt-Cyprus triangle, but let's be real—that's a medium-term play at best.
Which brings us right to LNG, which is being framed as the most logical path forward. And honestly, it’s way more secure too, especially when you compare it to suppliers like Iran or Russia. LNG gives us the ability to fully diversify because global availability is constantly ramping up, along with the sheer number of people willing to sell it. And keep in mind, these numbers only represent what actually hits the market. You've got Australia, Nigeria, even Qatar—everyone has some untapped potential sitting there waiting to be tapped through their terminals.
Chart 3, LNG
https://i.ibb.co/GPCtQc4/Untitled.jpg
What the chart above doesn't explicitly show is that Americans have stepped up to become the biggest LNG exporters on the planet! And it's actually them who are going to squeeze Russia out of the European market. Between everything currently being built or already approved in the US (most of which was set in motion even before the situation in Ukraine kicked off), they are absolutely on track to have export capacity by the end of 2024 that matches the entire annual volume Europe used to import from Russia. Of course, terminal utilization won't hit a perfect 100%, and not all that cargo is going to head straight to Europe—we still have to account for Australia, Qatar, Malaysia, and the rest of the world—but the scale is there.
But look, in the short term, replacing Russian gas is basically impossible unless you start cutting off consumers entirely. Besides the fact that a good chunk of LNG is already booked up for the next few years, there’s also the issue of that one specific group of people—you know the type, the ones who spent the last twenty or thirty years playing Molotov-Ribbentrop 2.0—who are essentially responsible for putting Russia, Ukraine, and all of Europe in this mess today. They’re the kind of folks who could practically refuse to accept a single LNG tanker. Just for context, about a third of the total LNG capacity in the EU is currently sitting right there in Spain.
By the way, imports from Russia make up about 52-53% of the total gas imports into Europe. On the flip side, Russia's exports to Europe account for about 70-80% of their total gas exports, depending on how much they've started shifting toward China now that the pandemic has wound down.
Since the gas Russia sends to Europe can't just be rerouted to China anytime soon—aside from maybe smaller amounts moving through Yamal LNG—for them, those European exports are essentially lost for the time being. If Europe and America follow through on their end of the deal (and I see no reason why they wouldn't), Europe might actually manage to diversify its imports before Russia can successfully pivot its exports elsewhere.
Look, this is coming from DW, so we know it isn't just Russian propaganda:
Could LNG fill the gap?
While American energy firms are working hard to ramp up LNG export capacity by nearly 20%—aiming for 13.9 billion cubic feet per day by the end of the year, per the International Energy Agency—there is a real concern that this fresh supply might not be quite enough to save Europe if Putin turns OFF The taps...
LNG exporters need time
In the immediate future, "LNG would not be able to fully compensati [ for Any Natural gas shortfall fra Russia ]," noted Weidensteiner, pointing toward "a lack of available short-term capacity among major exporters like the US and Qatar."
The Commerzbank Economist Said that , though Europe still Has The capacity to process or regasify The imported liquid gas, "it would be difficult to deliver it to end-users since the current distribution infrastructure just isn't built for such a massive pivot toward LNG..."
https://www.dw.com/en/if-russia-turn...ity/a-60490682