As the Russia-Ukraine conflict enters its fifth week, uncertainty hangs over global commodity and financial markets, especially energy. It is almost impossible to change the supply-demand balance between supplier and importing countries in the current global energy equation. Because, most importantly, almost all of the supplier countries have locked in medium- and long-term supply contracts of at least three to five years. For this reason, it is practically impossible to suddenly turn to these countries and say, "shift your supplies to another geography." Therefore, at this point, it is necessary for all countries that are the leading suppliers of oil and natural gas to reestablish the global fossil fuels equation.

Currently, Saudi Arabia is the world's biggest oil supplier, exporting 6.5 million to 8 million barrels of oil to the global market daily. Russia follows Saudi Arabia with its daily exports ranging from 4.5 million to 6 million barrels. While Iraq has increased the oil supplies to the global markets for export purposes from 2 million to 4 million barrels since 2012, the United States has continuously expanded its supply from 3 million to 3.4 million barrels since 2013 following the lifting of the export ban in 2012 after 41 years. It has now exceeded Canada's daily exports of between 2.5 million and 3.3 million barrels. Let's not confuse the concepts of the daily production of countries with their daily exports.

The world's most important oil producer is the U.S, with its production exceeding 16 million barrels per day. Russia follows the U.S. with 13 million barrels and Saudi Arabia with 12 million barrels. Saudi Arabia is one of the countries with the highest rate of exporting a significant part of its daily production. Oil reserves, daily production and daily exports... the ranking of countries changes under each category.

The same goes for natural gas. The ranking of the countries varies according to their reserves, daily production and exports. Russia is the world's highest natural gas supplier and exporter with 240 billion cubic meters (bcm). It is followed by the U.S. with 140 bcm, with its serious moves in the last few years. The third country is Qatar with 120 bcm-125 bcm. Finally, let's not forget Norway with 110 bcm and Australia's 105 bcm.

Australia's total exports, 80% of Qatar's exports and half of the U.S. exports are liquefied natural gas (LNG). In contrast, 90% or more of Russia and Norway's exports is through pipelines. When the detailed data are examined, all the cards are on the table regarding the extent to which the Gulf countries, Iran, Iraq, Libya and the U.S. can step in as supplier countries in daily oil exports. It’s also seen that they should increase their daily production in order to increase their daily exports. And most importantly, with the nuclear deal with Iran back on track, when will the restrictions on Iranian oil and gas be lifted? (Earliest would be June, according to experts). In natural gas, the equation is more complicated because LNG exports are more arduous than exports via pipeline.

More core on the horizon

Setting oil and natural gas as fossil fuel derivatives aside, what Patrick Graichen, the undersecretary of the Federal Ministry of Economic Affairs and Climate Action and one of the founders of the German-based think tank Agora Energiewende, said about coal is also critical. In Graichen's words, with Russia's last steps, the narrative that natural gas is a bridge energy technology is distorted and the bridge collapsed.

This means possibly more coal in the power grid in a short time while, in the long term, it means faster green hydrogen. However, DGraichen said that saying goodbye to coal has been inevitable for net-zero carbon targets since 2014 and emphasized that a more immediate focus on renewable energy is necessary. This shows that there is also an uneasiness arising from the issue of energy supply security, suddenly prioritized after the Russia-Ukraine tensions, is overtaking the topics of green development, green energy and sustainability.