Russia conflict stokes energy concerns as gas prices continue to climb
With inflation in the United States up significantly and a potential war between Russia and Ukraine, fear is bubbling up that energy prices may increase further after a steady march upward over the past year.
“It can’t be good for prices,” R Street Institute resident senior fellow for energy Philip Rossetti told FOX Business of a potential war in Ukraine. “We don’t know how bad it would be for prices. But it can’t be good for prices.”
“These are state-owned enterprises in Russia that generally produce these resources,” Rossetti said of Russian energy companies. “These companies are intrinsically tied to Russia’s political interests. So I don’t see a way that you can essentially separate out the oil and gas concerns from the politics that are happening right now and Europe’s dependence on Russian energy.”
He added: “So there’s not an easy way for Europe to just transition away from its reliance on Russian energy resources. And I think this plays a big part in why Russia is able to make these moves and know… that blunts the options that are available in terms of sanctions.”
Rossetti emphasized that oil and gas production in the U.S. is still very high, even despite some of Biden’s energy moves early in his presidency. But he said there is room for the U.S. to counter Russia’s energy diplomacy.
“The United States is a major oil and gas producer, as is Russia. So Russia is going to be using its energy resources to leverage geopolitical concessions,” Rossetti said. “We have to understand that we have an ability to mitigate those with policies that understand our role in global energy security issues.”