Russia's War on Ukraine

The energy sector continues to feel the effects of Russia’s invasion of Ukraine, which in February 2022 sparked the first truly global energy crisis. Two years on, energy prices have pulled back from record highs, but trends vary widely among regions. In many parts of the world, prices are still elevated – holding back economic growth, straining the finances of households and businesses, and complicating efforts to improve access to electricity. Energy markets, faced with an unusually high degree of geopolitical uncertainty, remain on edge.

In Ukraine, the energy sector is on the front line of the war for the second consecutive winter. As temperatures have dropped, Russia has resumed a broad military offensive targeting power plants and other key energy infrastructure across the country, which in 2022 and 2023 caused extensive damage and left many Ukrainians without reliable supplies of electricity or heat for long periods. Recent improvements to Ukraine’s air defence systems have helped safeguard power supply this winter, but Russia’s attacks are ongoing, and additional resources are needed to tackle structural problems that persist within the country’s power sector.

Meanwhile, the war continues to reshape the global energy system in profound ways. Trade patterns for oil and natural gas have shifted dramatically since Russia’s invasion as governments look to strengthen their energy security. At the same time, cleaner alternatives to fossil fuels are growing faster than ever. Due in part to policies unveiled by governments after February 2022, the world’s capacity to produce renewable power is expanding at a remarkable pace, while the popularity of clean technologies such as electric vehicles and heat pumps is surging. The biggest legacy of the global energy crisis triggered by Russia’s invasion of Ukraine may be that it accelerates the end of the fossil fuel era – with IEA projections now showing that under today’s policy settings, demand for oil, gas and coal is set to peak within the decade.

The IEA and many of our member countries are working closely with Ukraine to help the country’s energy system recover from Russia’s attacks and lay the groundwork for its transition to a secure and sustainable energy future.

The IEA and Ukraine have a long history of collaboration dating back to 2007. In July 2022, Ukraine officially joined the IEA Family as an Association country, and a two-year Joint Work Programme was signed in December 2022. Through the exchange of data, analysis and policy advice, the IEA is supporting Ukraine’s efforts to reconstruct and modernise its energy sector, further integrate its energy system with the European Union’s, and drive down carbon emissions – core objectives outlined in the government’s 2050 energy strategy.

In the past year, the IEA has also convened three workshops with Ukrainian stakeholders, including one in Kyiv. These workshops had a strong focus on the benefits of leveraging distributed energy resources such as solar PV in Ukraine.

With the displacement of people and industry during the war shifting patterns of energy consumption, distributed resources – which have a shorter lead-time for deployment than conventional generation – can help meet demand where it is needed the most. Greater deployment of distributed energy resources would also reduce the power system’s vulnerability to Russian attacks – and could help Ukraine meet its ambition to reduce greenhouse gas emissions 65% by 2030 compared with 1990 levels.

The IEA has been at the forefront of managing the global energy crisis that resulted from Russia’s invasion of Ukraine.

On two occasions, IEA member countries agreed to take the exceptional step of releasing oil from their emergency reserves to reduce the strains in markets and send a unified message that there would be no shortfall in supplies as a result of Russia’s invasion.

In the first collective action following the invasion, agreed on 1 March 2022, IEA member countries committed to release 62.7 million barrels of emergency oil stocks. On 1 April, they agreed to make a further 120 million barrels available from emergency reserves. This was the largest stock release in the IEA’s history and coincided with the release of additional barrels from the US Strategic Petroleum Reserve. The two coordinated drawdowns in 2022 were the fourth and fifth in the history of the IEA, which was created in 1974. Previous collective actions were taken in 1991, 2005 and 2011.