Putin's Energy Dominance in Europe Ends Permanently

Global Energy Dynamics Shift Dramatically in 2023

by Zain ul Abedin
Putin's Energy Dominance in Europe Ends Permanently
© Matthew Stockman/Getty Images

In a significant geopolitical shift, Europe has substantially reduced its reliance on Russian oil, opting instead for alternative sources from North America, recent research from Rystad, a European energy consultancy, indicates.

This change marks a critical setback for Vladimir Putin's influence over Europe's energy supply. In 2020, Russian imports constituted 39% of the European Union's gas usage, demonstrating the depth of Europe's energy dependence on Russia.

Additionally, Russia was a primary supplier to the UK, providing 30% of its diesel, 27% of its coal, and up to 10% of its gas. However, current data reveals a dramatic decline in these figures, nearing zero in some areas. Jorge Leon, Rystad’s Senior Vice President for Oil Markets, expressed surprise at the adaptability of the energy system in an interview with The Telegraph.

"Before the conflict, the mere thought of ceasing direct oil and gas purchases from Russia seemed unthinkable. But now, it's largely a reality," he commented.

Diminishing Russian Influence

While some Russian fossil fuels may still reach Europe indirectly through refineries in other nations, Leon underscores that the overall trend is a significant decrease in direct reliance on Russian energy.

He points out that Russia's once-dominant position in the energy sector is weakening due to a surge in suppliers outside OPEC, primarily from the Middle East. 2023 marked a pivotal year with substantial contributions from non-OPEC countries, including Brazil, Argentina, Canada, Norway, and continued robust growth in the United States.

"The stars aligned, leading to a significant influx of new projects, essentially rescuing the energy landscape," Leon added. Despite this shift, Leon cautions that Europe's reduced dependency on Russian oil might be somewhat misleading.

He notes that Russia has increased its crude oil sales to nations like India, with some of that oil potentially making its way back to Europe. The Centre for Research on Energy and Clean Air, which tracks Russian energy exports, estimates that Russia has garnered approximately €605 billion (£517 billion) from fossil fuel exports since February 2022. This development underscores the ongoing global energy market dynamics and the shifting geopolitical landscape.