IEA Head Fatih Birol Talks EU’s Russia Gas Phase-Out
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Hello and welcome. This is The Michelle Hussein Show. I'm Michelle Hussein. I speak with people like Elon Musk. I think I've done enough. And Shonda Rhimes. That's so cute. This will be a place where every weekend you can count on one essential conversation to help make sense of the world. So please join me, listen and subscribe to The Michelle Hussein Show from Bloomberg Weekend, wherever you get your podcasts.
You certainly ask interesting questions.
Bloomberg Audio Studios. Podcasts. Radio. News. Let's bring you more now, though, on that EU deal to phase out Russian gas. The agreement reached in the early hours of this morning. We'll see Europe end purchases of LNG and pipeline gas by September 2027. Joining us in our Brussels studio to discuss the head of the International Energy Agency, Patti Birrell. Good morning. Great to see you in the studio. This has been a long road for the European Union. The war is three and a half years longer now.
how significant is this moment is this deal thank you i think it is a historical deal for europe because russia has been the number one energy supplier of europe over half a century since since 1970s and natural gas was the most important fuel here until recently nearly about half of the natural gas consumption in europe came from russia so after the russia's invasion of ukraine and russia using natural gas as a weapon europe took this decision european countries it is historical and on one hand of course i congratulate the european countries but on the other hand The market context we are in is also helping Europe, creating a room of manoeuvre such as huge amount of LNG, liquefied natural gas, coming to markets starting from 2026 through 2030.
So there will be a lot of alternatives to Russian gas for European countries.
Is there a risk, though, that European countries simply replicate the situation they had of an over-reliance on a single supplier by turning to other countries? We know that the United States has also talked about wanting Europe to buy a lot more LNG from them.
In fact, when we look at the history, the story with the... Russian gas over dependences started in 1970s when Europe wanted to diversify from Middle East oil, went to another supplier to Russia. And I very much hope that Europe now learn its lesson. that doesn't repeat the same mistake and create diversification for its energy imports. For me, the number one golden rule of energy security is diversify as much as possible. There are a lot of countries providing gas to the markets. Markets will turn from years and years being a market of sellers to the markets of buyers, so it will make the Europeans stronger. And of course, the US is a very important ally. Europe will continue to import US LNG, but there will also be other opportunities for Europe.
Where do Russian suppliers go now then with this deal to phase out the European purchasers?
What is the significance of the EU's deal to phase out Russian gas?
This is a key question for Russians. And first of all, they will lose a lot of money, lots of revenues. And it is not easy for gas, unlike oil, to go from one destination to another because a big chunk of the Russian gas came to Europe through pipelines, which were built years and years. And now Russia is trying to increase exports to China which is in fact a difficult undertaking for several reasons.
The EU Energy Commissioner also saying this morning that a proposal to ban imports of all Russian oil is going to be tabled at the beginning of next year as well. They're aiming to have that done by the end of 2027 too. How important would that be in this move away from Russian supplies?
I think when we see the Russian energy imports, bulk of it is, as we discussed, is natural gas. There is oil and there is also uranium supply, nuclear supplies coming from Russia. I think to ban the oil from Russia is also very timely from a political perspective. But in addition to that, there is a huge amount of oil in the markets. There's a surplus of oil, oil production. So it wouldn't have a major impact on the oil prices if it is done in a gradual and in a careful way.
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