“As Europe turns away from Russian gas, it will become increasingly reliant on LNG imports to satisfy its needs — and this, in turn, will result in new trading partnerships and an accompanying transformation of global energy geopolitics.”

As Europe Turns Away From Russian Oil, Gas Exporters’ Global Clout Is Increasing

Aerial view of a liquefied natural gas (LNG) filling wharf, the first one its kind in the Three Gorges region with a designed refueling capacity of 31,000 tons per year, as seen on February 24, 2022, in Yichang, China.

Few events in recent years have proved to be as transformative of international relations as Russia’s invasion of Ukraine and the resulting imposition of sanctions on the Russian economy. The war and sanctions have sundered or sharply curtailed most remaining trade and diplomatic relations between Russia and the West, forcing Western firms to suspend their operations in Russia and plan for a world divided into highly segmented trade blocs.

Every major industry will be battered by these seismic shifts, but none more so than energy: Prior to the invasion, Russia was Europe’s principal supplier of imported oil and natural gas, so European efforts to replace those imports with supplies acquired elsewhere will have a powerful impact on the global trade in both commodities.

This impact has already been evident in the petroleum realm, where increased European demand for non-Russian supplies has contributed to rising gasoline prices everywhere, including the United States. Its greatest long-term effect, however, is likely to be seen in the market for liquefied natural gas (LNG), once a relatively minor factor in the global energy equation that is gaining ever-increasing prominence. As Europe turns away from Russian gas, it will become increasingly reliant on LNG imports to satisfy its needs — and this, in turn, will result in new trading partnerships and an accompanying transformation of global energy geopolitics.

All this has come about because European leaders, over the course of many decades, chose to rely on the mammoth oil and gas reserves of Russia (and before that, the Soviet Union) to supply their countries with affordable energy for industry, home heating and electricity generation. Russian gas imports have become especially important in recent years as the European Union (EU) has sought to reduce its reliance on coal (because of its high carbon content) and nuclear power (out of a fear of accidents). By 2020, Europe obtained about 30 percent of its imported oil from Russia and a whopping 57 percent of its imported natural gas.

Prior to Russia’s invasion, plans were in place to further increase Europe’s reliance on Russian natural gas, largely through construction of the Nord Stream 2 pipeline. Nord Stream 1, opened in 2011, runs under the Baltic Sea from Vyborg in northwestern Russia to Lubmin in Germany; a parallel conduit, Nord Stream 2, was begun in 2018 and completed in late 2021. Many prominent figures in the U.S. and Europe had protested construction of Nord Stream 2 on the grounds that it would increase Europe’s dependence on Russian energy and thereby give Moscow greater sway over European decision making in a crisis. German officials were still debating whether to give it their final approval in early February when Vladimir Putin began amassing forces for the invasion, at which point the new German chancellor, Olaf Scholz, suspended the certification process.

The cancellation of Nord Stream 2, and other measures being undertaken to wean Europe off Russian oil and gas, will severely disrupt the energy equation in Europe and force it to find alternative sources for both primary fuels. The Europeans are, of course, also trying to increase their reliance on renewable sources of energy, and some — like France, the Netherlands and the United Kingdom — plan to renew their reliance on nuclear power. But their economies have long been structured around access to abundant inputs of oil and gas, and it will not be easy for them to eliminate their thirst for them any time soon. Searching elsewhere for additional supplies of these resources will, therefore, constitute a major policy priority in the months and years ahead.

Securing additional imports of oil and natural gas will be no easy task. Finding more oil will be tough enough — the major suppliers are now producing at near-maximum capacity — but acquiring more gas will prove even more difficult. Petroleum has the advantage of being a liquid, and so can readily be transported by tanker ship from suppliers located anywhere on the planet. Europe possesses many ports and refineries for unloading and processing crude oil, so even if it will be forced to pay higher prices to compete with consumers in Asia and elsewhere, it should be able to obtain adequate supplies to meet its basic needs in the months ahead.

Obtaining additional gas imports, however, will pose a greater challenge. Natural gas can be delivered by pipeline, but most of Europe’s piped gas comes from Russia, and the construction of alternative conduits, say from North Africa or the Caspian Sea area, will take many years. Gas can also be delivered by sea in the form of LNG, but that requires an elaborate infrastructure for liquefication on the supplier’s part and for regasification at the receiving end — infrastructure that is only available in certain parts of the world. Europe now possesses 28 large-scale LNG import facilities and is building more, but will need a much larger number if it is to increase its reliance on LNG. On the other side of the equation, it faces stiff competition for access to the relatively small number of gas producers with the liquefication facilities needed to export LNG.

These challenges were brought into sharp relief on March 28 when President Joe Biden and the president of the European Commission, Ursula von der Leyden, announced a joint plan to eliminate the EU’s reliance on Russian gas entirely by 2027. To achieve this ambitious goal, the U.S. pledged to double its LNG shipments to Europe, from about 25 to 50 billion cubic meters per year, while the EU agreed to acquire additional amounts from other sources and to build dozens of new regasification facilities. With Russia playing a diminished role in supplying Europe’s energy, the handful of major LNG suppliers are thus set to enjoy increased geopolitical clout.

The world’s growing reliance on LNG — now being accelerated by Europe’s drive to reduce its reliance on Russian gas — is upending the global energy equation.

A comparison of the top five oil and natural gas producers is useful in highlighting this power shift. To begin with, the LNG trade is highly concentrated: While the top five exporters of oil (in rank order) — Saudi Arabia, Russia, Iraq, the United States and the United Arab Emirates (UAE) — account for approximately 50 percent of global exports, the top five suppliers of LNG — Qatar, Australia, the U.S., Russia and Malaysia — account for 70 percent of such exports. Expand these groups to the top 10, and the extent of concentration is even more pronounced: While the leading oil exporters command 70 percent of the global marketplace, the leading LNG suppliers control an astounding 89 percent.

The comparison between oil and LNG exporters is revealing in another sense. While rosters of the top 10 in each category include several overlaps, including Nigeria, Russia and the United States, there are many discrepancies. Saudi Arabia, long considered the epicenter of global oil production and the dominant force in the Organization of the Petroleum Exporting Countries (OPEC), doesn’t appear on the LNG list, which is led by its arch-rival Qatar. Similarly, Australia, never before thought of as an energy superpower, occupies a prominent place on the LNG list.

As Europe comes to rely on LNG for an ever-increasing share of its natural gas, those few major exporters of this resource are bound to acquire greater clout in world affairs, just as the major oil producers have long exercised disproportionate influence. With this in mind, it is worth looking more closely at some of the leading LNG exporters.


Occupying a small peninsular attached to Saudi Arabia’s Persian Gulf coast, Qatar possesses the world’s third-largest reserves of natural gas (most of it found in offshore areas) and is the world’s leading exporter of LNG. It is a member, along with neighboring oil-producing states, of the Gulf Cooperation Council (GCC), a multilateral military arrangement backed by the United States. But Qatar’s rulers have sought to pursue a more independent stance than its fellow GCC members, supporting rebel groups in Libya and Syria that were opposed by Saudi Arabia, and retaining cordial relations with Iran. In 2017, Saudi Arabia, Bahrain and the UAE cut off diplomatic relations with Qatar and denied its planes access to their airspace; relations were only restored in 2021, after Qatar contributed troops to the Saudi-led intervention in Yemen. Despite these squabbles with its neighbors, Qatar has come to play a singular role in the Gulf region, hosting the Al Jazeera media network and hosting delicate negotiations, such as the peace talks between the Taliban and the United States. With Qatar likely to remain the world’s leading supplier of exportable gas, it is poised to play an even more pivotal role in the years ahead.


Often thought of as an outlier in global politics — noted in particular for its loyalty to the U.K. and well-established military ties with the U.S. — Australia has begun to play a more autonomous and muscular role in world affairs. The country has, of course, long been a major exporter of vital resources, including iron ore, bauxite and coal. It was not known, however, as an oil supplier, and it is only recently, with the development of mammoth fields discovered off the country’s northwest coast, that it has emerged as the world’s second leading supplier of LNG. Most of this gas now goes to China, Japan and South Korea; in fact, Australia is China’s leading supplier of LNG. But as China has begun to play a more assertive role in the Asia-Pacific region — for example, by militarizing small islands in the South China Sea — Australia has become leery of overreliance on the Chinese market. To afford itself greater autonomy, Australian leaders have increased their military spending and drawn closer to the United States, a move given formal substance with the recent signing of the Australia-U.K.-U.S. (AUKUS) security pact and the acquisition of nuclear submarine technology from the United States. With its increased income from LNG exports, Australia will be able to further enhance its military capabilities and play a more prominent role on the world stage.

The United States

For decades, the U.S.’s energy politics have largely been governed by its dependence on fossil fuel imports, not exports. Up until the onset of the 21st century, the U.S. was highly reliant on imported petroleum, and this dependency played a significant role in shaping its foreign policy, particularly toward the Middle East. But the introduction of advanced drilling technologies — notably hydraulic fracturing, or “fracking” — has allowed the U.S. to exploit its vast shale reserves and largely eliminate its reliance on imported oil. Moreover, fracking has resulted in an explosion in natural gas production, permitting both the replacement of domestic coal plants with gas facilities and, for the first time, the large-scale export of gas. Whereas the U.S. possessed no functioning LNG export terminals as recently as 2015, it now has seven in operation, with a dozen more awaiting government approval and financing. Under the joint U.S.-EU plan announced on March 28, the Biden administration will speed up the approval process for these added facilities and otherwise help Europe to wean itself from Russian gas. This move is being welcomed by those on both sides of the Atlantic who seek to terminate Russia’s dominance of the gas trade, but has raised concern among those who fear it will perpetuate Europe’s reliance on fossil fuels and so slow the transition to a green energy future.

These few vignettes demonstrate how the world’s growing reliance on LNG — now being accelerated by Europe’s drive to reduce its reliance on Russian gas — is upending the global energy equation and enabling new actors to assume leading roles. How all this will play out in the years ahead remains to be seen, but it is already evident that political analysts’ tendency to equate “energy geopolitics” with a certain lineup of familiar players now needs to be reconsidered, allowing for the incorporation of major LNG exporters into our calculations.

By Michael T. Klare
Source: https://truthout.org/articles/as-europe-turns-away-from-russian-oil-gas-exporters-global-clout-is-increasing/?eType=EmailBlastContent&eId=5334fde3-bc8a-46eb-8ce3-25388edd0656