Energy

U.S, EU Strikes New Energy Deal in an Effort to Replace Russian Gas

Barely 24-hours after Russian ruler Vladimir Putin demanded payment for Russian gas be made in the local Ruble, the U.S. and EU have struck a deal that seeks to replace the Russian gas supply.

According to a report, the United States is working to supply 15 billion cubic metres (bcm) of liquefied natural gas (LNG) to the European Union oil markets this year. This is coming up as Europe intensifies efforts to wean itself off Russian gas supplies.

Investors King also gathered that the U.S. President, Joe Biden and European Commission President Ursula von der Leyen will announce the formation of a task force dedicated to reducing Europe’s dependence on Russian fossil fuels.

According to data by the EU, 10% of gas used in the EU is produced by the EU with Russia typically supplying some 41% of the rest of the region’s needs.

The U.S president also revealed that the commission will work with EU countries to enable them receive about 50 bcm of additional LNG until at least 2030. Although the figures by the U.S is not exactly clear whether it was referring to add this to the already existing amounts from last year’s 22 bcm of U.S. exports to the European Union, this remains a welcomed update for the EU who have depended on Russian gas for the longest.

Investors King also gathered that the European Union has stepped up its efforts to secure more LNG after talks with a number of supplier countries continued following Russia’s invasion of Ukraine.

A number of countries are individually doubling efforts in reducing their dependency on Russian oil. Germany is one country that has made significant progress in reducing its importation of Russian gas, oil and coal.

According to a report by Germany’s Economy Minister, Robert Habeck, importation of Russian oil now accounts for 25% of German imports which is a record down from 35%, with gas imports cut to 40% from 55% and  Russian coal imports cut to 25% from 50% before the invasion.

Since the start of the war between Russia and Ukraine, Russia has leveraged its fossil fuels as a weapon to frustrate the global oil market after receiving a number of sanctions from world leaders.

Investors King Contributor

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