Oil and Gas Market Trends, Russian Sanctions and Ukraine War | by World As One 4PEACE | Coins | February 2024

Austria plays an important role in the sanctions regime against Russia. Because Austria through this State-owned oil and gas company OMV, which relies on oil and gas supplies from Russia to supply its network of fuel retail stations across Central and Eastern Europe. Additionally, according to media reports, Reuters Austrian government leaders this week said they were interested in reducing energy ties with Russian companies, particularly Russia’s state-owned gas giant Gazprom. The latter effectively means that OMV will have to terminate its long-term gas import contracts with Gazprom and other entities.

However, OMV has firmly decided to strengthen its business ties with Gazprom, which has left EU member states questioning whether Austria’s neutral stance is the right approach going forward. Austria is not a member of NATO and has historically taken a neutral approach toward Russia.

At Davos 2024, business executives were particularly focused on global energy supply issues and how a possible Trump re-election would affect the outcome of the NATO alliance and European security. For example, Alfred Stern, CEO of Austrian oil and gas company OMV, spoke exclusively with CNBC reporters about the impact of the Russian-Ukrainian war on the company’s oil and gas business. He said the following about sanctions against Russia:

“We have basically seen the environment continue to deteriorate since the beginning of 2022. We had limited access to assets. “A unilateral change has been made and we are now in the final stages of seizing assets and bringing them to the new company ahead of Christmas.”

In November 2023, OMV announced that the company will join Vienna Energy to explore geothermal energy development for the European energy transition strategy. This joint venture agreement allows for a new research project located in the eastern part of the Vienna Basin, already known as “GeoTief Wien”.

It will be interesting to see how OMV’s renewables and petrochemicals push plays out in the long-term scenario for Europe’s energy transition strategy and many countries’ Net Zero pledges to reduce emissions to net zero by 2050. It’s called Net Zero Emissions (NZE) 2050.

To learn more about the global market trends facing the oil and gas industry and the energy transition in Europe, read this edition (Industry talk time) by Regions and Producers.