The mere threat of a Russian invasion of Ukraine is roiling world energy markets. Oil and gas prices are marching upward, hitting levels not seen in years. President Joe Biden is bracing Americans for the ripple effect on their wallets when they fill up their gas tanks.

“I will not pretend this will be painless,” Biden said at a White House briefing on Tuesday.

Energy-hungry Europeans, meanwhile, are already facing volatility in their natural-gas markets. They could feel the pain more acutely than others if Russian President Vladimir Putin decides to attack Ukraine, and the Biden administration in turn puts sanctions in place, including a delay in approving a new natural-gas pipeline between Russia and Germany.

Preventing the pipeline from going into operation could damage the Russian economy, but also could have negative impacts on Europe.

So who stands to lose if the Russian-owned pipeline, known as Nord Stream 2 and which lies under the Baltic Sea, remains idled?

Russia and Germany, primarily, but if Russia took further action to stop other flows into Europe, the effects could be “catastrophic,” says Northeastern’s Julie Garey, assistant teaching professor of political science who specializes in international relations.

“If Germany ends up with an energy crisis it will almost certainly also affect its commitment to Ukraine should Russia also cut off the pipeline there and/or stage a military offensive,” she says.

Neighboring Poland and Slovakia, meanwhile, which rely on lucrative Russian transit fees from the current pipeline system, could benefit the longer the 760-mile pipeline remains offline.

The United States and a few other countries also would likely try to fill some of Germany’s demand if Russia cuts it off, but that might not be enough. “In the long term it might force Western Europe’s hand to develop more renewables more quickly, but not if they first have to overcome a catastrophic shortage if Russia cuts it off entirely,” Garey adds.

Russia produces 10 million barrels of oil a day, or about 10 percent of global demand, and is Europe’s largest supplier of natural gas, used for cooking, heating buildings, and electricity. Russia has larger natural resources to extract the gas from than the United States, but the U.S. has an advantage of its own.

“The oil and gas industry here in the United States is technologically very advanced,” says Matthew Eckleman, an assistant professor of civil and environmental engineering at Northeastern. Which makes the U.S. the world’s top producer of liquified natural gas (LNG), cooled at around -260 degrees Fahrenheit, making it easier to transport on ships instead of through pipelines.

“We have more leverage to help allies in Western Europe,” he adds.

As of November 2021, China is the No. 1 destination for U.S. LNG transported by ship, followed by Turkey, Japan, and the United Kingdom, according to the U.S. Energy Information Administration.

Only in the last five years or so has the United States begun to export LNG. Prior to 2015 the country traded natural gas with Canada and Mexico extensively through pipelines. But LNG exports have “really gone up amazingly now” as Europe’s energy crisis and shortages in China send demand for American shipments soaring, Eckleman says.

Europe has tried for years to cut its dependency on Russian natural gas. But a number of European Union countries, particularly those closest to Russia, are still almost completely dependent on Moscow for their gas.

So while the U.S. could step up and fill some of the void should Europe need it, it wouldn’t be enough to meet demand. That is where other countries can step in.

Biden and German Chancellor Olaf Scholz have promised to work together to stop Nord Stream 2 should Russia invade Ukraine. The pipeline is not yet operational but has emerged as a key issue in the standoff.

While the U.S. does not directly control the pipeline, it has imposed economic sanctions against those involved in the pipeline’s construction and operation.

Last year, the United States and Germany signed an agreement that prevented Germany from turning the pipeline on if Russia attacked Ukraine. And the United States has an extensive relationship with Germany—they are major trading partners who also share deeply entrenched military interests through the NATO alliance.

The Biden administration believes that these connections, coupled with Germany’s commitment to upholding the bilateral agreement, and its concerns about the effects of Russian aggression, will outweigh the United States’ current domestic priorities.

“Biden also believes Russia will see losing access to the pipeline and/or the Germany energy market as too costly,” says Garey.

Will Moscow suffer financially?

The bigger question, as Northeastern’s Eckelman sees it, is whether there is a market for Russian gas if Europe can’t buy it because there’s no pipeline. The answer is yes, as evidenced by a January 2022 energy partnership between Russia and China.

Moscow signed a 30-year contract to supply gas to China via a new pipeline, bolstering an existing energy alliance with Beijing. China is making big plays in renewable energy installations and setting decarbonization goals for its economy.

China is the number-one producer and user of coal “by far, I mean it’s not even close,” says Eckelman. “And if they’re to achieve their decarbonization goals, then probably they will look to be importing more natural gas.”

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