Europe's energy markets anxious over Russia-Ukraine tension

ANKARA - Europeans are keen to avoid a return to the freezing winter of five years ago when the gas supply was switched off for nearly 13 days due to a Russia-Ukraine price dispute as tensions escalate again in the region due to Russia`s intervention in Crimea.

Russia currently supplies more than 25 percent of Europe’s natural gas, and 80 percent of that gas transits through Ukraine.

According to experts, this is making Europe hesitant about making major decisions on the tension between Russia and Ukraine.

Mesut Hakki Casin, a professor of international relations at Istanbul`s Yeditepe University, stressed that natural gas is a must for Europe to maintain economic growth.

"Germany, as Europe’s economic locomotive, strikes a reconciliatory tone with Russia to prevent any problems with energy supply," Casin said. However, he points out that the G-8 countries have decided to suspend their participation in Sochi 2014 summit planned for June.

Nonetheless, Casin adds that "Russia would not leave Europe absent of natural gas, unless something extraordinary happens."

Gokhan Yardim, the manager of a Turkey-based gas marketing firm and the former head of the country`s state-run oil pipeline company, also stated that if the natural gas that Turkey imports from Russia via Ukraine stops flowing, the industrial sector of Turkey, particularly electricity production, would face difficulties. This is because half of Turkey`s electricity production comes from natural gas and Turkey`s industrial sector uses nearly 40 percent of all the natural gas that Turkey imports.

Turkey imports 14 billion cubic meters of natural gas with West Line pipeline from Russia, which transits through Ukraine. The regarding amount constitutes about 28 percent of total natural gas import of Turkey.

"Turkey could increase its liquefied natural gas (LNG) import to ease the difficulties faced in a potential deduction in the West Line," Yardim said, adding that "however, Europe would also do the same thing, which would increase the LNG price globally, which would eventually have negative effects on Turkey’s current deficit."

Countries like Bulgaria, Estonia, Finland, Latvia, Lithuania and Sweden import all of its consumed natural gas from Russia. The dependence rates (%) of the other European countries to Russian gas are as follows;

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Germany

39.9

Austria

52.2

Belgium

43.2

The Czech Republic

80.5

France

17.2

Croatia

37.1

The Netherlands

5.8

Italy

19.8

Hungary

49.5

Poland

52.2

Romania

24.2

Slovakia

63.3

Slovenia

57.4

Greece

54.8