Russian-Ukraininan gas crisis
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Economic Geography Essay
Introduction
In 2004, Gazprom exported around 150 Billion cubic metres of gas to 22 European countries. In a Europe of 35 countries, Russian gas accounted for nearly 40% of total imports and 28% of gas demand in that year. All Russian gas exports to Europe
(except deliveries to Finland and the portion of Turkish exports delivered via the Blue
Stream pipeline) transit through three countries: Ukraine, Belarus and Moldova.
Ukraine holds the pivotal geographical position with more than 80% of Russian gas exports to Europe delivered via that country in 2004.
During the 1990s, the Ukrainian/Russian gas relationship was characterised by:
• Ukrainian inability to
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Several member states as Bulgaria and Slovakia were without any gas. • 27th January 2009: Nabucco summit in Budapest. • 28th January 2009: The European Parliament separate 250 million Euros for Nabucco project, and in all, would support the strategic energy-investments with 1,5 billion Euros
Russian ambitions
The events of January 2009 was finally proven that from the power sources Russia may forge not only a political capital, but also able to influence union decision making on an extraordinary manner with this, mostly with the „devide and conquer” tactic. As a result of the inflow oil dollars in the past years Russia confirmed its positon on the European energy market significantly. The country made investments additional not just in the transportation infrastructure, but gave your unambiguous signs, that wants to hold its monopol position in the market. Because of this they try to interfere that the European Union could get energy from somwhere else - to sidestep
Russia has built a strong, but stagnating economy on several natural resources to include the refinery and export of natural gas and oil. According to the Jim Picht (2014) exportation of natural gas and oil to Eastern Europe account for 70 percent of Russia’s exports and 53 percent of the government’s revenue. Along with exporting oil to Eastern Europe, Russia also exports too many countries to include China and Belarus. Europe fueled majority by Russian supplied natural gas and oil, the dependency of Europe’s need for this natural resource is the reason Russia’s economy is so strong. In 2014, when Russia decided to invade the neighboring country of Ukraine has led Europe to begin searching for other suppliers of their natural resources. If Europe finds other countries to supply the natural resources
Russia’s history has made it the largest territory on earth and its geography has given it a wealth of natural resources.3 Access to vast timber reserves in the center and east of the country, rich fisheries, and vast petroleum reserves are all important resources secured by Russia over its history. Petroleum is particularly important.3 Between 1998 and 2008, the Russian economy experienced a growth rate of seven percent driven largely by high oil prices.3 Despite the recent decline in petroleum prices, exports of national resources have caused the Russian economy to grow on the whole since the fall of the Soviet Union.4 Amongst other things, Russia has been able to use revenue from petroleum exports to finance large military endeavors. Many of these endeavors have been contradictory to US
Entry into this enormous market was considered very valuable as well as very risky. The importance of an early position into the Russian oil market can not be understated. In 1983, Russia supplied 12 million barrels
The challenge for some of the periphery states is that they get the majority of their energy resources from Russia, which opens them to potential coercion to Russia’s national interests. However, one of Russia’s
Russia’s energy security depends largely on the global demand and international energy market price. Thus, Russian energy security is vulnerable to market forces and benefits from economic stability, particularly that of the European countries, with whom Russia conducts the majority of its energy trade. Let us see the history trend of Russia’s energy trade during the financial crisis.
The price of natural gas on the economy tends to affect all industries, and firms down to the individual consumer. Although there are highs and lows when considering pricing, the overall assessment will, and should confuse the average person, as the perceived devastation affect is almost non-existent when demand seems to be untouched. The changes
“In 2013, the U.S. overtook Qatar as the world's top propane shipper” (Dezember, 2016). Foreign markets are the major driving forces responsible for the increasing demand. About half of all U.S. exports wind up in Latin America, while the rest of US exports are shipping to northwest Europe and Asian markets. JBC Energy estimates the deficit between what Asia can supply and demand for liquefied petroleum gas will rise to a record of 1.42 million barrels per day in 2016, surpassing last year's 1.3 million barrels per day.
Venezuela's state-run oil company, PDVSA, tumbled months behind around shipments of fuel under oil-for-loan bargains for China and Russia. Those deferred shipments got political partners in a bad feeling. Now Venezuela is $55 billion dollars in credit for their missing shipments. Now they are giving new knowledge under PDVSA's operational disappointments and also their handicapping sway on the country's unravellings communist economy. In view, oil accounts is the main revenue to the Venezuela's economy. PDVSA's emergency extends to the citizens torment through triple-digit inflation and food shortages reminiscent of the winding down days of the Soviet Union. Those late cargoes to state-run Chinese and Russian organizations are more nearly 750 million, as stated by a Reuters examination of the PDVSA documents. In conclusion, at the end of January, PDVSA was late on about 10 million barrels of fuel.
world market. The exports of oil also put Russia on the leading positions in the
High flying oil price benefited oil producing countries past 5 years until recent petroleum price plunge. Russian was the one of beneficiaries who has enjoyed the high oil price. The Russian economy stabilized without much of restructuring the economic system or economic growth by developing new industry. High oil price created budget surpluses and keep Russian economy afloat; However, increase of the US oil production, oil price war between Saudi and Kuwait, debilitating European economy, and decreasing oil consumption in Asia contributed to drive oil price down quickly and substantially. Russian GDP signals that its economy gets pounded and affected hardest among major oil exporters. The Russian budget has been in balance with small portion of public debt in comparison to national GDP. Falling price of petroleum drastically reshaped the Russian economy. Financial forecasts and analysis predict that economic recession could come back to Russia. Crumbling Russian ruble and dwindling exports slashed 2014 Russian GDP, and its GDP will fall lower than Spain or South Korea. Without serious police changes or development of technology, already battling Russian economy will be much worse place than 2014. The Russian economy suffers from three severe blows: debilitating structural policies and strict financial sanctions from the West, and continually falling oil price.
For over 40 years, Europe has been relying on Russia for the importation of energy, such as oil.5 One of Russia’s major gas company, Gazprom, is one of the world’s largest gas distributing companies, causing many countries to become dependent on the Russian company for gas. In 2015 alone, Gazprom exported around 158 billion cubic meters of gas to Europe, and of those European countries to have received gas, Germany was the highest, with an import of 45.31 billion cubic meters of Gazprom gas. Countries in the Baltic region and countries in south eastern Europe are usually very dependent on Russian gas. The European Union is Russia’s most involved trading partner, especially when it comes in terms of oil. About 41% of Russia’s exports are sent to EU countries.7 According to Gazprom’s statistics, Western European countries make up 82% of Gazprom’s exports, and Central European countries make up 18% of their exports.3 These numbers are significant because it displays Europe’s major dependence on Russian oil, which is a major problem, because of Russia’s ability to deprive Europe of energy at any given time, as shown from 2006 to 2009, when Russia cut off Ukraine 's gas line due to disputes regarding gas prices.23 If Russia decides to shut off gas to a region, it can lead to people being without ways to heat their homes or cook their food, leaving a big liability on the people. Europe’s vulnerability to these gas shortages gives Russian leverage over many EU countries who heavily
After twenty six years, the nations that were granted independence from the Russian Federation are still dealing with the affects of the fallout; In particular, Russia’s European neighbor, Ukraine. In an article dated September 29th, from the Russian News Agency TASS, it gives an overview of the recent implications of the civil war in the Donbass region. Russia and Germany are urging the Ukrainian Government to follow the Minsk Protocol, in order to keep peace and maintain a working relationship between all the countries listed on the agreement (TASS 2016). There has been constant conflict in the Donbass region since the beginning of 2014, with times of cease-fire, but nothing significant. The conflict is a result of the Russian demographic in Eastern Ukraine, wanting separation from a Western influenced Ukraine. This paper will examine the geographical aspect of this relationship and how it has affected the conflict.
When Vladimir Putin took office as the Russian President, he created economic prosperity and consequently restored national pride. Consequently, Putin became a popular lead with an approval rating at 80%. Unfortunately for Russia, as goes the prices of oil so goes its economy. The downward trend of oil prices and Russia’s large dependence on oil exports dealt a severe blow to the Russian economy.
Russia's new strength is also based on its vast reserves of oil and natural gas, which as the price of crude exceeds $ 120 per barrel, give the country tremendous bargaining power, not only in its relations with countries directly dependent on its supplies as Ukraine, Germany and Hungary, but, in general, by the capacity of influence that give
The oil industry is one of great power that countries are invest in. Russia is one of the leading contenders in producing oil and exports the goods to various countries. With great resources comes great strength. Oil is of the utmost important to every country therefore, Russia has an upper hand in some respects. Moreover, the history behind the oil pipelines and how Russia connects to different countries allows for insight into the power they withhold politically and economically, and on the improvements that need to be made to continue growth in this industry.