The former chief executive of Ukraine’s state-owned oil company has warned that a dramatic rise in European energy prices is inevitable if the Russian destruction of Ukrainian energy infrastructure continues unabated.
Andriy Kobolyev, who is a former head of Naftogaz, said in an interview that “Russia is trying to wage a global energy war and Ukraine is part of that war and if the markets perceive that Russia is winning that war the consequences will be very serious. You will see a spike in prices all round the globe”.
He said that there would be no point holding any more Ukraine reconstruction conferences until Ukraine is supplied with weapons to save its energy infrastructure from the wave of attacks by Iranian-made Shahed drones and guided bombs. “There will be no Ukrainian economy to reconstruct.
Recall that last week a massive missile and drone attack destroyed one of Ukraine’s largest power plants and damaged others, as part of a renewed Russian campaign targeting energy infrastructure. The Trypilska plant, which was the biggest energy supplier for the Kyiv, Cherkasy and Zhytomyr regions, was struck numerous times, destroying the transformer, turbines and generators and leaving the plant ablaze.
Kobolyev, one of Ukraine’s energy specialists and the chief executive of Naftogaz for seven years to 2021, has been fighting corruption charges in Ukraine that he claims are politically motivated.
Reacting, he said that the impact on energy prices of the Russian attacks would be twofold – a potential increase in Ukrainian demand for gas and electricity in Europe, and an overall market response to the likelihood that Vladimir Putin is winning the war in Ukraine. “If European energy markets start to believe Russians are winning this war it will have a dramatic negative effect on energy prices”.
Many European countries have made moves to increase their ability to import gas via liquified natural gas tankers since 2022, so analysts said that the continent was not nearly as vulnerable to the war in Ukraine as it was at the beginning of Russia’s full-scale invasion.
But a recent strike on Ukraine’s gas storage facilities in the west of the country caused a significant spike in European gas prices because these facilities are still operational and are still used by European gas traders. If the facilities were under Russian control – or were destroyed entirely – then traders would face a tighter supply picture.
Story was adapted from the Guardian.
