'Amnesia' over energy security is coming to an end as Europe faces a supply crunch, S&P's Dan Yergin says

• The West is treating energy security more seriously now, according to S&P's Dan Yergin.
• Now that energy supplies are waning from reduced Russian supply, Europe is at major risk.

Western governments are waking up once again to energy security as Russia threatens US and European governments' fuel supply with its unpredictable behavior, according to the vice chairman of S&P Global.

Speaking to CNBC recently, Dan Yergin said Russian President Vladimir Putin is creating an energy war in Europe by reducing supply to the region, and its pushing them to realise their energy security is at huge threat.

"One thing that has been noticed about Putin over the years is that he really understands the energy markets and he knows what he's doing," Yergin, an energy historian, said. "He's reducing, managing supplies to create disruption and drive up prices," he added.

Europe has been on edge in recent weeks after Russia cut its gas supply to the region via the Nord Stream 1 pipeline for a 10-day maintenance period. While Russia resumed the flow of natural gas as planned last Thursday, leaders fretted the closure could become permanent, prompting countries like Germany and France to draw up emergency plans to deal with any supply shortfalls.

Russia already cut about 60% of its natural gas supplies to Europe through Nord Stream, blaming sanctions for delaying the delivery of a piece of equipment from Canada. On Monday however, the Kremlin said that the repaired turbine will be installed upon its return and then be supplied in "corresponding volumes, the volumes which are technologically possible," Reuters reported.

Still, Europe, which is heavily dependent on Russia for its energy, is nowhere near out of the woods as supply for the winter is under threat, largely down to Russian retaliation for Western sanctions over its war in Ukraine. Major industry voices have warned that Europe could even face a power crunch earlier than expected and that the region will be underprepared for chaos in the energy markets this winter.

European natural gas prices have risen by almost 140% so far this year, while crude oil now costs 30% more than it did at the start of 2022.

"This amnesia about energy security is over," Yergin said, adding that governments are now realising the stakes are very high given their heavy dependence on Russia.

To support his view, Yergin cites financing issues with US refineries which is limiting more supply from entering the market. "There is some additional refinery capacity coming from the United States but we've had a lot of closures or converting them to bio-energy refineries," he said.

"There is on top of this global oil tightness [...] a very big problem about refining," Yergin added.