Energy
What Happens To Gas Supply If Russia Goes Broke?
Published:
Last Updated:
Russia has begun to ship gas to Europe through the Ukraine again. The dispute over whether Ukraine firm Naftogaz was siphoning fuel is now over, at least for now.
Russia faces a significant threat to its economy, one that is making the country progressively more poor with each passing day. With the price of oil falling, the value of the nation’s most valuable export is evaporating. The Russian government is having to provide financial aid to large companies inside the country, but it is not clear how long that will last. The government’s financial reserve are not endless.
What happens when Russia is essentially broke? Its only international leverage is its exports of oil and gas. The international markets have plenty of options to buy crude. Europe has no realistic options to get gas from alternative sources.
If Russia falls into a deep recession, the gas supply into Europe is going to bring a much higher price. Russia has shown it has the ability to cut it off and that gives it the ability to ask unreasonable compensation.
Douglas A. McIntyre
Sponsored: Want to Retire Early? Here’s a Great First Step
Want retirement to come a few years earlier than you’d planned? Orare you ready to retire now, but want an extra set of eyes on your finances?
Now you can speak with up to 3 financial experts in your area for FREE. By simply clicking here you can begin to match with financial professionals who can help you build your plan to retire early. And the best part? The first conversation with them is free.
Click here to match with up to 3 financial pros who would be excited to help you make financial decisions.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Editors' Picks
