Europe Has Been Weaning Itself Off Russian Gas For Years

When markets became jittery over the situation in Ukraine earlier this week, European natural gas prices surged.

The thought was that a conflict between Russia and Ukraine would disrupt gas distribution in Europe, since Russia is such a major exporter.

But as Guggenheim’s Scott Minerd writes, “The threat of natural gas pipeline disruption may be less severe than initially feared.” He explains:

Europe has diversified its sources of natural gas over the past decade, almost halving its reliance on Russian gas. Much of the remaining dependence on Russian gas is concentrated in Eastern Europe’s less globally important economies. Furthermore, gas inventories were built up over an unusually warm winter, so most major European countries have a buffer of several months supply in the event of a shock.

This is not to say gas disruption would be totally immaterial. But it certainly would have less of an impact today than it did a decade ago. Check out the chart:

NOW WATCH: Money & Markets videos

Want to read a more in-depth view on the trends influencing Australian business and the global economy? BI / Research is designed to help executives and industry leaders understand the major challenges and opportunities for industry, technology, strategy and the economy in the future. Sign up for free at research.businessinsider.com.au.