Canada-Ukraine Chamber of Commerce expresses support for Energy for a Secure Future
“The full-scale Russian aggression against Ukraine has brought global energy security to the forefront. Russia has long used its dominant position in the global energy market to finance aggressive actions.
Since the onset of the full-scale attack on Ukraine in February 2022, Western countries have taken steps to limit Russia’s ability to fund the war, implementing embargoes and price caps on Russian oil and gas. Consequently, Russian energy exports have decreased.
However, it has become increasingly evident that these efforts have achieved only partial success. In July 2023, the world’s largest oil exporters, Saudi Arabia and Russia, deepened oil production cuts, driving prices higher. In August, Russian oil export revenues surged by $1.8 billion, reaching $17.1 billion, with the price of Russia’s oil, Urals, averaging $74 per barrel in that month—well above the G7’s $60 price cap. Despite Germany halting direct oil imports from Russia, significant quantities of Russian oil continue to enter that country and others in Western Europe.
Russia also continues to profit from exports of liquefied natural gas (LNG) and liquefied petroleum gas (LPG) legally allowed into the EU. Last year, the EU imported 30% more LNG from Russia than the previous year, solidifying Russia’s position as Europe’s second-largest LNG supplier, surpassing Qatar. EU countries now purchase the majority of Russia’s LNG, providing critical revenue to continue the war.
Supported by energy revenues, Russia persists in its devastating attacks on Ukraine, targeting cities and infrastructure sites with missiles and drones. Over the past months, these attacks have resulted in numerous civilian casualties in cities like Kyiv, Kryvyj Rih, Odesa, Lviv, Kharkiv, and others. Russian troops continue to occupy significant portions of Ukrainian territory and attack Ukrainian forces, which are fighting to reclaim their homeland.
It is evident that Western economic warfare, particularly the energy aspect, against Russia has hit a roadblock. Russia shows no signs of ending its aggression, and there’s growing consensus that, if not stopped, Russia will be able to continue the war for years.
The primary reason for this failure to halt the flow of Russian energy is the supply constraints in the global energy market. This is where Canada’s role as a supplier of low-emission energy can become pivotal. Canada can play a crucial role as an alternative source of oil and natural gas on the world stage. Doing so could help curb Russian aggression by significantly competing for and reducing its energy revenue. Simultaneously, Canada can contribute to global emissions reduction since its oil and gas have much lower emissions intensity compared to energy from Russia and many other nations. The global demand for oil and gas will remain strong for some substantial time. If allowed, Russia will continue to benefit from its oil and gas exports.
Several global leaders and diplomats, including German Chancellor Olaf Scholz, Japan’s Prime Minister Fumio Kishida, Ukraine’s Ambassador to Canada Yuliya Kovaliv, and Poland’s Ambassador to Canada Witold Dzielski, have expressed a direct interest in Canadian natural gas reaching global markets. In June 2022, Ukraine’s state-owned gas distributor, Naftogaz, signed an agreement for LNG supplies with Canadian energy developer Symbio Infrastructure. Much more is needed.
We commend the efforts of the Energy for a Secure Future in promoting Canada’s role as an LNG exporter, which will contribute to energy security and global emissions reductions.”
Zenon Potichny
President
Canada-Ukraine Chamber of Commerce
