Vladimir Putin recently reopened the Nord Stream 1 gas pipeline after the European Union (EU) had called on its members to start rationing its natural gas out of fear of the Kremlin cutting off Russia's flow to Europe entirely.
Still, fears of a worsening global energy crisis remain high amid the ongoing Russia-Ukraine war.
“Vladimir Putin has really extended the war in Ukraine to a second front, which is the energy front in Europe," Daniel Yergin, vice chairman of S&P Global and author of "The New Map: Energy Security and the Clash of the Nations," said on Yahoo Finance Live (video above). "He’s trying to not enable them to achieve what they need, drive up prices, break the coalition … governments are breaking and that’s what Putin wants to see and he’s using energy to get there."
Unfortunately, Yergin warned the global energy crisis is far from over.
“I think it actually could get worse," he said. "The German economics minister, who has warned it could lead to a Lehman-style contagion, more likely it would be a deep recession because it would radiate out from Europe to the rest of the global economy."
The German Economy Ministry cited low supply volumes from Russia as reason for higher gas prices. Energy companies are picking up the slack and supplying at a higher price, causing them to incur more loss, while other energy firms have gone bust.
The North America Electric Reliability Corporation (NERC) warned of “elevated” levels of energy shortfalls as higher-than-anticipated temperatures force outages.
According to Yergin, the Biden-Harris Administration needs to adopt an alternative climate strategy to lessen its reliance on the global oil supply.
“I think they really have to do two things at the same time — continue to pursue their policies around climate, and at the same time, assure that we have adequate production for a world in which oil demand is going up, not down,” he said.
Yaseen Shah is a writer at Yahoo Finance. Follow him on Twitter @yaseennshah22
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