Asia’s energy markets watching for Russia-Ukraine fallout

Asia’s energy markets watching for Russia-Ukraine fallout

SINGAPORE- Asia is expected to face higher oil, gas and coal prices if Russia invades Ukraine and triggers sanctions and reprisals from the West, analysts say.

While Asia could potentially benefit if Russia diverts its energy exports from Europe to the east, Europe's hunt for non-Russian gas could boost liquefied natural gas (LNG) prices and draw away Asia-bound cargoes, they warned.

Threatened sanction from the United States and Europe could also hamper Asia's ability to take advantage of any additional energy supply Russia might offer.

Jitters over such supply disruptions sent oil prices to more than seven-year highs on Monday.

The conflict has also spurred trade moves, with China last week signing a 30-year gas supply deal with Russia, its third-largest gas supplier.

"The new gas deal via the Far East route shows that escalating tensions with the West has pushed forward Russia's 'Pivot to the East', a long-term strategy to diversify its resource exports to Asian countries, especially China," Kaho Yu, principal Asia analyst at risk consultancy Verisk Maplecroft, said in a note.

Some 37% of Russia's crude exports in 2021, about 1.9 million barrels per day (bpd), went to Asia led by China, South Korea and Japan, according to Sushant Gupta, a research director