{"id":11696,"date":"2022-02-25T15:13:30","date_gmt":"2022-02-25T21:13:30","guid":{"rendered":"http:\/\/blog.uwsp.edu\/cps\/?p=11696"},"modified":"2022-02-25T15:13:31","modified_gmt":"2022-02-25T21:13:31","slug":"the-economics-and-politics-of-russian-energy","status":"publish","type":"post","link":"https:\/\/blog.uwsp.edu\/cps\/2022\/02\/25\/the-economics-and-politics-of-russian-energy\/","title":{"rendered":"The Economics and Politics of Russian Energy"},"content":{"rendered":"\n
\"The<\/figure>\n\n\n\n

As the military tensions heat up\nbetween Russia and the Ukraine and the political tensions increase between the\nUnited States and Russia, this blog provides a brief summary of Russia\u2019s energy\nimportance. Russia is a major player in global energy and is particularly important\nfor Europe and China.<\/p>\n\n\n\n

Table 1 below shows the 10 largest oil producers in the world and their share of global production.\u00a0According to the U.S. Energy Information Administration (EIA), in 2020 Russia was the world\u2019s third-largest producer of petroleum and other energy liquids. Russia had an annual average of 10.5 million barrels per day in total liquid fuels production. The United States ranked first with an annual average of 18.6 million barrels per day and Saudi Arabia ranked second at 10.8 million barrels per day. <\/p>\n\n\n\n

Table 1: Largest Oil Producers and\nShare of Global Production – 2020<\/strong><\/p>\n\n\n\n

\"Table
Source: U.S. Energy Information Administration<\/em><\/figcaption><\/figure>\n\n\n\n

Table 2 below show the 10 largest oil consumers in the world and their share of global consumption. <\/p>\n\n\n\n

Table 2: Largest Oil Consumers and Share of Consumption<\/strong><\/p>\n\n\n\n

\"Table
Source: U.S. Energy Information Administration<\/em><\/figcaption><\/figure>\n\n\n\n

Note that while Russia consumes 3.7\nmillion barrels per day, it produces 10.5 million barrels, which provides for\nsignificant exports of petroleum and other energy liquids. China ranks second\nin consumption at 14.0 million barrels per day but only ranks fifth in global\nproduction at 4.86 barrels per day, meaning it relies significantly on imports\nof oil. Russia is a key player in making up the difference between consumption\nand production for China, and China is important to Russia economically. Reuters<\/em>\nestimates that approximately 15.5% of China\u2019s oil imports come from Russia (second\nonly to Saudi Arabia) and that China accounts for 15.4% of Russia’s total crude\noil exports. <\/p>\n\n\n\n

European countries are not major oil\nproducers, but Germany ranks tenth in global oil consumption. Collectively, the\nEuropean Union relies heavily on oil imports, with Russia once again playing a\nmajor role. According to Eurostat<\/em>, the European dependency on imports\nfor oil and petroleum products reached a record high in 2020, when the European\nUnion relied on net imports for 96.96% of its energy needs. In 2020, Russia\naccounted for approximately one-third of European oil imports.  <\/p>\n\n\n\n

It isn\u2019t just oil that is imported, Europe\nalso relies extensively on natural gas imports. According to Eurostat, Europe\nrelies on net imports for approximately 83% of its natural gas. In 2020, Russia\nprovided 23.0 % of natural gas imports, with Ukraine and Belarus providing\n12.8% and 10.3% of natural gas imports, respectively.  According to the EIA, Europe is Russia\u2019s main\nmarket for its oil and natural gas exports. On the flip side, Europe is the\nmain source of Russian oil and natural gas revenues.  <\/p>\n\n\n\n

In 2020 the United States imported\n2.877 billion barrels of crude oil and other liquid energy products according\nto the EIA. Russia provided 197.7 million barrels, accounting for nearly 7% of\nU.S. imports. The United States is the world\u2019s largest producer and consumer of\nnatural gas, with production exceeding consumption in 2020. The U.S. does\nimport some natural gas, with approximately 98% of imports coming from Canada.<\/p>\n\n\n\n

Energy dependence creates economic\ndependence and consequently has political consequences, for both the buyers and\nsellers of energy. Russian energy is important to the global energy market, but\nthe global energy market is important to Russia. The importance of Russia in\nthe global energy market and military tensions between Russia and Ukraine have\ncreated uncertainty in world energy pricing and supply. Brent Crude oil is a leading\nglobal price benchmark for oil. After beginning the year at $79 a barrel, by late\nFebruary the price was hovering around $100 barrel.  And oil prices affect gas prices, which in\nturn affect shipping and transportation costs, which in turn affect product\ncosts.<\/p>\n\n\n\n

In the long-term the\nRussian-Ukrainian conflict may lead to energy sourcing and supply changes for\nseveral countries, including the Unites States. Short-term, the conflict will\nimpact energy pricing, global economies, and the financial markets.<\/p>\n\n\n\n

For further information:<\/strong><\/p>\n\n\n\n

  1. From the U.S. Energy Information Administration:
    1. EIA – Russia Energy Overview<\/a><\/li>
    2. Top Producers and Consumers of Oil<\/a><\/li>
    3. U.S. Petroleum and Other Product Imports<\/a><\/li>
    4. Oil and Petroleum Products Explained<\/a><\/li>
    5. Natural Gas Imports and Exports<\/a><\/li><\/ol><\/li>
    6. From Europa, an official website of the European Union, statistics on European energy:
      1. Europa – European Energy<\/a><\/li>
      2. Natural Gas Supply<\/a><\/li><\/ol><\/li>
      3. From Reuters, info on Russian exports to China:
        1. Reuters Factbox: Asian Buyers of Russian Oil, Gas, and Coal<\/a><\/li><\/ol><\/li><\/ol>\n\n\n\n
          \"Kevin<\/figure>
          \n

          Kevin Bahr is a professor emeritus of finance and chief analyst of the Center for Business and Economic Insight<\/a> in the Sentry School of Business and Economics at the University of Wisconsin-Stevens Point. <\/p>\n<\/div><\/div>\n","protected":false},"excerpt":{"rendered":"

          As the military tensions heat up between Russia and the Ukraine and the political tensions increase between the United States and Russia, this blog provides a brief summary of Russia\u2019s energy importance. Russia is a major player in global energy and is particularly important for Europe and China. Table 1 below shows the 10 largest […]<\/p>\n","protected":false},"author":136,"featured_media":11702,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2,7,527,12],"tags":[124,305,342,343,344],"_links":{"self":[{"href":"https:\/\/blog.uwsp.edu\/cps\/wp-json\/wp\/v2\/posts\/11696"}],"collection":[{"href":"https:\/\/blog.uwsp.edu\/cps\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blog.uwsp.edu\/cps\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blog.uwsp.edu\/cps\/wp-json\/wp\/v2\/users\/136"}],"replies":[{"embeddable":true,"href":"https:\/\/blog.uwsp.edu\/cps\/wp-json\/wp\/v2\/comments?post=11696"}],"version-history":[{"count":3,"href":"https:\/\/blog.uwsp.edu\/cps\/wp-json\/wp\/v2\/posts\/11696\/revisions"}],"predecessor-version":[{"id":11704,"href":"https:\/\/blog.uwsp.edu\/cps\/wp-json\/wp\/v2\/posts\/11696\/revisions\/11704"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/blog.uwsp.edu\/cps\/wp-json\/wp\/v2\/media\/11702"}],"wp:attachment":[{"href":"https:\/\/blog.uwsp.edu\/cps\/wp-json\/wp\/v2\/media?parent=11696"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blog.uwsp.edu\/cps\/wp-json\/wp\/v2\/categories?post=11696"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blog.uwsp.edu\/cps\/wp-json\/wp\/v2\/tags?post=11696"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}