Energy Analytics

Ukraine Advance — Turning Point or False Dawn?

byBill Farren-Price

Ukraine’s extraordinary military success in rolling back the Russian occupation around Kharkiv in early September has raised hopes that Kiev may be on the cusp of a broader victory that would see Russian troops ejected not just from the Ukrainian territories taken since February, but also Russian-annexed Crimea and the Donetsk and Luhansk regions occupied since 2014.

Can we infer from this that the war could soon be over? Or that Russia could resume its role as a major oil and gas exporter to Europe? In short, no.

Ukraine’s north-eastern charge will buoy Ukrainian morale and heap more pressure on President Putin, especially from Russian nationalists, dismayed with the performance of their country’s military. Putin’s latest outreach to his Chinese counterpart looks desperate rather than bold.

But the prospect of a settlement by force or diplomacy that opens the way for Russian oil and gas exports to flow unsanctioned into Europe is close to zero. While Russian oil exports have been surprisingly resilient given EU sanctions, we still expect oil trade to diminish toward the end of the year as the embargo bites.

On the gas front, European buyers would ideally like years rather than weeks to replace imported Russian gas. But the Kremlin’s decision to shut off supply has forced that painful adjustment to happen sooner. This is a hard lesson for European citizens, but EU leadership is unlikely to have any last-minute doubts about its divorce from Russian energy. For its part, Moscow may have overplayed its hand — Europe is once bitten, twice shy.

An honest appraisal of Moscow’s weaponization of energy shows the gloves have been off for months. Beyond holding back gas supply to European customers, Russia has interfered with central Asian oil exports and made its influence felt in other spheres. The failure to clinch a new Iran nuclear deal and the pent-up oil supply that implies is thought in part due to Russian pressure on Tehran. OPEC’s September switch to tightening supply rather than raising it also benefits Russia, keeping oil prices high just as its export volumes are set to decline.

In summary, this war isn’t over and even when it is, Russia’s position as a strategic energy supplier to Europe is irreparably damaged, which is why Ukraine’s military progress has passed by oil and gas markets with barely a murmur.

Bill Farren-Price

Bill Farren-Price

Bill Farren-Price is a director at Enverus where he leads the Macro Oil Intelligence team’s international energy policy and geopolitical research. He joined Enverus through the acquisition of RS Energy Group (RSEG) in February 2020. Bill has 25 years of experience in the energy industry, working as a consultant and industry journalist focused on countries in the Middle East and North Africa. Before founding Petroleum Policy Intelligence (PPI), which was acquired by RSEG in 2010, he led oil research at Medley Global Advisors. He has held senior correspondent and editorial posts with international news wires including Knight-Ridder Financial News (latterly Bridge News) and Agence France-Presse. He edited the Cyprus-based Middle East Economic Survey. A graduate of the School of Oriental and African Studies (SOAS) at the University of London, Bill’s areas of expertise include global oil and gas markets, energy policy and Middle East politics.

Subscribe to the Enverus Blog

A weekly update on the latest “no-fluff” insight and analysis of the energy industry.

Related Content

Energy Transition
ByCarson Kearl

In a world where energy value can make up a small portion of the revenue stream from emerging business models, what else is at play? Enverus Intelligence Research® views effective energy transition business as taking advantage of two key additive...

Intelligence Oilfield Services
ByErin Faulkner

Permitting information for oil and gas wells is one of the most readily available and least lagged pieces of data on industry activity, but it is often seen as a poor indicator of future drilling activity.

Enverus Press Release - Exploring falling rigs and rising production
Energy Analytics Minerals

While horizontal drilling and hydraulic fracturing significantly enhance well productivity, they have had the opposite effect on the land department.

ByJoseph Gyure, Editor, Enverus Intelligence

All seven regions covered by the Enverus Day Rate Survey saw rates rise sequentially for the second time in three months in January as confidence started to strengthen among U.S. land drilling contractors.

Energy Transition Intelligence
ByJoseph Gyure, Editor, Enverus Intelligence

Ørsted took a blade to its project pipeline, reducing its ambition to 35-38 GW of installed capacity by 2030 from the previous 50 GW.

ByJoseph Gyure, Editor, Enverus Intelligence

SLB has reaffirmed its 2024 financial guidance, part of an effort by international oilfield services companies to reassure investors after the Saudi Ministry of Energy called off plans to increase its maximum sustainable capacity by 1 MMbo/d to 13 MMbo/d...

Analyst Takes Energy Transition

Despite the relatively scant incentives for buying an EV in the U.S. compared to other countries, the U.S. Environmental Protection Agency (EPA) presented its plan in 2023 to tighten tailpipe emissions regulations.

Enverus Blog - Increase visibility and efficiency with OpenTicket Mobile digital field ticketing software
Trading and Risk

Amid significant volatility in global energy markets, U.S. President Joe Biden’s decision to temporarily halt approvals for pending liquefied natural gas (LNG) projects seems to defy conventional trading wisdom. This audacious move has given rise to a variety of viewpoints...

Enverus Blog
Intelligence Trading and Risk

In the ever-changing energy landscape, understanding market fluctuations, weather conditions and system resilience is paramount when factoring ideas for trading opportunities.

Let’s get started!

We’ll follow up right away to show you a quick product tour.

Let’s get started!

We’ll follow up right away to show you a quick product tour.

Sign up for our Blog

Register Today

Get Energy Transition Research updates straight to your inbox by filling out the form below.

Sign Up

Power Your Insights

Connect with an Expert

Access Product Tour

Speak to an Expert