Trade relations have been changing around the world in recent years, in part due to geopolitical upheaval. One example of this reconfiguration, note McKinsey Global Institute director and senior partner Olivia White and colleagues, is the shift in Russia’s share of natural gas exports to Germany following Russia’s invasion of Ukraine. It fell from around 35 percent in January 2022 to less than 1 percent in 2023. However, Germany rapidly tapped alternative sources for its energy, in particular imports of natural gas from Norway, supplemented by liquefied natural gas from the United States.
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A box area graph shows the source of natural gas imports to Germany from January 2022 to November 2023. In the first half of 2022, Germany’s imports of natural gas from Russia and the Czech Republic (in the form of re-exported liquefied natural gas from Russia) declined 35 and 14 percentage points, respectively. Germany has made up the shortfall by increasing natural gas imports primarily from Norway, the Netherlands, and Belgium, supplemented by liquefied natural gas from the US.
Footnote: Exports from Belgium are largely re-exports of liquefied natural gas.
Source: ENTSOG via German Federal Network Agency; McKinsey Global Institute analysis.
End of image description.
To read the report, see “Geopolitics and the geometry of global trade,” January 17, 2024.