Box B: War in Ukraine and the options for Europe's energy supply

Christopher Aitken and Erkal Ersoy

National Institute Global Economic Outlook, 2022, issue 6, 30-34

Abstract: On 24 February 2022, Russia invaded Ukraine. Immediately, European countries made it clear that they stand with Ukraine in the conflict with Russia through swift action, sanctions, and the relaxation of immigration rules. The imposed sanctions have had pronounced effects on the already struggling Russian economy. One of Russia's only remaining income streams is its fossil fuel exports, especially natural gas exports to Europe. The idea that European countries are effectively financing a war they condemn is anathema to the public and politicians alike. This analysis attempts to answer the question of whether Europe could realistically meet its energy requirements without Russia. To preview our conclusion, we argue that substituting away from gas imports from Russia is feasible in the medium to long term but very costly in the immediate future. That said, these costs would certainly be worth paying if doing so leads to an end to the war in Ukraine

Date: 2022
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