Coquest Daily Energy Report
Oil prices remained elevated early Monday morning, as geopolitical tensions in Eastern Europe and the Middle East have heightened concerns about an already tight supply outlook. Fueling fears of supply disruption in Eastern Europe, the United States on Sunday said it was ordering the departure of eligible family members of staff from its embassy in Ukraine and said all citizens should consider leaving due to the threat of military action from Russia. The latter will face severe economic sanctions if it installs a puppet regime in Ukraine, a senior British government minister said on Sunday, after Britain accused the Kremlin of seeking to place a pro-Russian leader in power there.
Germany’s dependence on Russian gas has left Europe with few options to sanction Moscow if it invades Ukraine and itself vulnerable should Russia stop gas exports to the West. A two-decade-old decision to phase out nuclear power and more recent moves to cut reliance on coal in an effort to bring down CO2 emissions means Germany is now more reliant on Russian gas than most of its neighbors, not just for heating but also for power generation. This year, the country’s last three nuclear power plants will be closed, just as Germany faces some of the highest energy prices in the developed world. All German coal plants are due to be closed by 2038.
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