• Oil prices rose above $100 a barrel for the first time since 2014.
• EU countries rely on Russia for energy needs
• Following the Russian attack on Ukraine, the prospect of streaming energy supplies through Nord Stream 2 seems dim.
• Boris Johnson, the British Prime Minister, has declared severe economic restrictions on transactions with Russia.

Following Russian attack on Ukraine, oil prices rose above $100 a barrel for the first time since 2014. Russia is the world’s third-largest oil and natural gas producer, and one of the main energy providers to the United States and China, the world’s two largest economies.

While the United Nations Security Council was holding a special session on the Ukraine crisis, Putin announced launching of “special military operation” for seeking “demilitarization and denazification” of Ukraine.   Rise in oil prices will negatively impact a large number of countries. It will contribute to the slowing of global growth and will increase current account deficit of many countries. Though it will be positive for the exporters in the Asia Pacific region but will adversely impact the energy bills of the countries relying on energy import.

Even while renewable energy is increasingly displacing fossil fuels in many regions of the world, including Europe, where renewables account for a bigger proportion of the energy mix, EU countries still purchase a considerable amount of energy from Russia.

A group of 10 nations, including France, Bulgaria, Croatia, Czech Republic, Finland, Hungary, Poland, Slovakia, Slovenia, and Romania, has previously requested the European Commission to include nuclear energy as a green source of power in order to minimise energy dependency. With the help of Russian technology, some of these countries want to build nuclear power facilities for reducing their energy budgets and as well as reducing reliance on energy imports.

Germany has decommissioned nearly all of its nuclear power plants and plans to phase out coal by 2030. The Nord Stream 2 project, which was expected to be the key to Berlin’s future energy security, involved direct natural gas transmission from Russia to Germany via the Baltic Sea.

The certification and approval process for Nord Stream 2 has been delayed by German Chancellor Olaf Scholz. Joe Biden has previously stated Washington’s position on Nord Stream 2 and warned to block it if Russia invaded Ukraine. Following the Russian attack on Ukraine, the prospect of streaming energy supplies through Nord Stream 2 seems dim.

India imports over 85% of its crude oil and half of its natural gas. Rising crude oil prices are seen as a big problem for India as any increase in raw material and energy prices could put more pressure on domestic companies’ margins in the future as well as increase the energy bill of Indian Government. This will depreciate rupee and further increase the cost of imports for Indian companies.

Boris Johnson, the British Prime Minister, has declared severe economic restrictions on transactions with Russia. Aeroflot has been barred from British airspace and assets of key Russian banks including state-owned VTB, have been directed to be frozen. As part of the sanctions, Britain has barred large Russian corporations from raising capital in the country.

Putin’s plan to reshape Europe’s geography might result in the continent’s most catastrophic conflict since World War II. It could result in the deaths of thousands of civilians and the displacement of hundreds of thousands of people fleeing Ukraine’s unrest.

NATO has reiterated that its commitment to the Washington Treaty’s Article 5 is unwavering and NATO stand united to defend each other.

Bureau Galactik Views