Russian Energy Vital for Europe Not US

As a major natural gas producer, Russia may be able to threaten Europe with winter supply disruptions in the midst of the Ukraine crisis, but that leverage doesn’t extend to the United States. And any pipeline disruptions in Ukraine would affect some parts of Europe worse than others.

Unlike oil, which is shipped via tanker and priced globally, much natural gas consumed in Europe is shipped by pipeline and priced by Russia. It often travels through Ukraine. That leaves Europe exposed to any supply disruptions in Ukraine or any use of natural gas by Russia for political leverage.

“This doesn’t directly affect the United States, which is not part of any of these pipeline networks, and does not buy any (liquid natural gas) from Russia, either,” said Olga Oliker, associate director of Rand Corp.’s International Security and Defense Policy Center.

via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza