Western countries will have to impose fuel rationing given the Russian

Paris: A crisis bigger than the 1970 ‘Oil Crisis’ has been created, riding on the sanctions imposed against Russia. International Energy Agency (IEA) Chief Fatih Birol warned that the United States and European countries might have to resort to fuel rationing in the coming times. There was a shortage of only crude oil in 1970. Birol pointed out that there is also a shortage of natural gas and electricity along with crude oil in the current crisis. The warning has been received at a time when the European Union has decided to ban fuel imports from Russia.

The fuel and energy demand had spurted in many countries while emerging from the Coronavirus crisis. But the leading countries were facing an energy crisis given the limited production and disruptions in the supply chain. These included the United States, China and European countries. China increased its fuel imports, whereas the United States opened up its strategic reserves to project a picture that the intensity of the fuel shortage problem had been reduced to an extent.

But the crisis in the fuel and energy sector faced by the European countries has not been entirely resolved and the Ukraine war has added further to the European woes. There is a major share of natural gas, crude oil and coal in energy production in Europe. All these three items are imported into the European countries from Russia. Russia fulfils more than 30% of the European demand. The European countries started imposing sanctions against Russia given the Ukraine war and certain countries have completely stopped fuel gas imports from Russia. Whereas the European Union has announced that the crude oil imports from Russia will be reduced by 90% by the year-end.

Against this background, the fresh warning issued by the IEA Chief becomes noteworthy. Fatih Birol has increased the concerns for the European countries further, claiming that the looming crisis will be bigger than the 1970 crisis. Birol reminded ‘Russia is the backbone of the international energy system. Russia is the biggest exporter of crude oil and natural gas globally. Russia is also known to be a leader in coal exports.’ Birol warned that if the sanctions remain in force, the European countries will be forced to impose ‘Fuel Rationing’. Considering the approaching summer holidays, even the United States could be faced with a fuel shortage.

Meanwhile, Russia has stopped the natural gas supply to Denmark. Russia informed that the fuel supply was stopped as Denmark failed to make the payment in Roubles. Earlier, Russia stopped fuel supplies to Poland, Bulgaria and Finland for the same reason.