Ukraine is Europe's Energy Aorta

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As a major natural gas producer, Russia may be able to threaten Europe with winter supply disruptions in the midst of the Ukraine crisis, but that leverage doesn't extend to the United States. And any pipeline disruptions in Ukraine would affect some parts of Europe worse than others.

Major routes of gas pipelines run via Ukraine.CNBC

Unlike oil, which is shipped via tanker and priced globally, much natural gas consumed in Europe is shipped by pipeline and priced by Russia. It often travels through Ukraine. That leaves Europe exposed to any supply disruptions in Ukraine or any use of natural gas by Russia for political leverage.

Ukrainian supply disruptions also potentially would be a more immediate problem for Eastern Europe than for Northern Europe. As the map shows, Ukraine acts as a conduit for pipelines going to Poland, Hungary, Romania, Slovakia and back into Russia. In contrast, Germany, for example, can access Russian gas via pipelines running through Poland and the North Sea.

All that said, Europe is generally less reliant on Russian natural gas this year than it was in previous years, thanks to a mild winter and solid gas supplies that are already in place.

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