Rising energy costs are driven by a myriad of global and domestic issues, the most notable being the crisis between Russia and Ukraine. Russia is one of the world’s top oil and gas suppliers, with 40% of the country’s revenue derived from oil and gas exports.
This revenue is helping to fuel Russia’s military buildup in Ukraine. However, at the same time, U.S. and U.K. sanctions on Russian oil are further compounding the spike in energy costs as the supply is no longer readily flowing from the country.
In addition, other European countries are beginning to cut ties with Russian oil, however, plans toward a ban are delayed. This is due to fears of economic impact, particularly in Germany. Germany receives about 34% of its oil supply from Russia.
Furthermore, the EU as a whole receives about 25% of its oil supply from Russian imports. And with energy costs already rising, pulling the plug on Russian oil could cause a major economic rift.