A few weeks ago, the US bank JP Morgan offered an apocalyptic warning that
barely made a ripple outside the financial press. It said that if Russia
completely halted oil exports, the shock to the world economy could be so
large it would instantly quadruple the price of oil to nearly $400 a
barrel. Right now, it’s hovering at around $100 a barrel.

Since the world is still heavily reliant on oil, the shock to the world
economy would be far worse than during the 1970s – and plunge us into a
deep recession.

But there’s more. This week, Russia also turned off most of its natural
gas supplies to Europe, via the Nordstream 1 pipeline as part of planned
routine maintenance. It is supposed to be just for a short period, but the
German government is seriously worried that Russia could turn off the tap
completely. Putin has already begun to cut gas shipments to Europe over
the last few months, driving prices continuously higher. It’s not
difficult to see how this could play out and why the impact would be
catastrophic.

The prices of oil and gas are set internationally, and in that market
Russia is a dominant player. Since world supplies are already stretched to
their limits, a ban from Russia would instantly drive up prices to what JP
Morgan called “stratospheric” levels.

While the United States has plentiful supplies for itself, Europe is still
deeply dependent on Russia. German and Italian industry in particular
would be crippled by higher energy costs and thousands of companies would
simply go bust. Millions of people would become jobless and their energy
bills would skyrocket to unsustainable levels. Millions would be unable to
afford to cook food or drive cars.

Putin has already been weaponising fossil fuels. He recently shut off gas
supplies to several European countries if they didn’t pay in roubles,
eventually forcing them to relent. He has also been cutting off Ukrainian
exports of food to drive up prices around the world. Natural gas now
rivals oil as the fuel that shapes geopolitics – and there isn’t enough of
it to go around, as Bloomberg News put it recently.

By abruptly shutting off supplies, Putin would deliver a colossal shock to
our oil and gas-dependent economies. Stockmarkets would plunge and
thousands of companies would go bankrupt from being unable to afford
energy supplies. Millions of people would lose their jobs and the West
would instantly lose the political will to send money to Ukraine. Putin
would win.

https://www.independent.co.uk/voices/russia-ukraine-oil-gas-energy-supplies-b2122896.html