Investments in both the hydrocarbon and renewable energy sectors are necessary – the executives of the oil giants throw the ball to the regulators Politicians and governments are preparing for potential social unrest as many countries face an energy crisis and rising inflation.
The global economy is rocked by war in Ukraine, oil, fuel and food shortages, and unrestrained price rises, crises that exacerbate each other.Everyone’s eyes now turn to Europe which is preparing for the upcoming Winter. Cold temperatures and oil and gas shortages due to sanctions against Russia threaten both businesses and households, undermining the foundations of the entire economy.
Analysts, however, say this winter will not be as big a problem as some fear, stressing that the real problem will start in 2023.
It is certain that we are facing a difficult winter, but the next one will prove even more difficult. The supply of hydrocarbons in 2023 will be limited compared to that of 2022, given the ongoing crisis Vitol CEO Russell Hardy said in a recent statement at the Adipec conference in Abu Dhabi, adding that the effects of the energy crisis and the increase in energy prices, which inevitably lead to an increase in the cost of living, will be main topics of discussion in 2023.
BP CEO Bernard Looney said: “energy prices are approaching levels that both consumers and companies will not be able to afford. Many households already spend 50% of their income on paying off bloated energy bills.Europe, however, is in a good place this year, due to the feverish replenishment of its gas reserves and government measures to protect households.
This year’s crisis has been addressed. We must now turn our eyes to the winter of 2023 Looney said.The CEO of the Italian energy giant Eni, Claudio Descalci, for his part, said that “we are in a good place this year. But as we mentioned, our main concern should be the next winter. We will not have Russian gas in 2023. Flows will be reduced by 98% or even 100%.
This could lead to severe social unrest. It should be noted that in Germany, Austria and the Czech Republic, protests have already begun over the exorbitant cost of energy. Analysts warn that these medium-sized gatherings are just the beginning.
The shocks caused by increased energy prices, whether it’s petrol prices or liquefied petroleum gas (LPG), often lead to social unrest, said Petronas CEO Datuk Tengu Muhammad Tawfiq, who said rising dollar rates and rising fuel prices were undermining the foundations of many Asian economies. All this at a time when governments have already taken steps to offset price pressures.
Many Asian economies are facing problems due to the pandemic, which has caused a series of bankruptcies in the small and medium-sized enterprises sector. There is a real risk of causing severe social unrest in these Asian countries, Taufik said.
The ball “in the regulators
A large portion of citizens accuse energy companies of speculation, since many of them enjoy exorbitant profits at a time when the cost of living for households is proving unbearable.
According to the statements of several CEOs of such companies to CNBC, these companies are simply responding to the imbalance of supply and demand, while stressing that it is governments that should take steps to support investments in the energy sector, which have decreased in recent years due to the transition to renewable energy sources (res).
The world must understand the new reality of both today and tomorrow, Looney said, adding that”there must be investment in hydrocarbons since our entire energy network is based on them.”
But many regulators are openly against the use of hydrocarbons, stressing that the real crisis is underlying climate change. According to recent statements by UN Secretary-General Antonio Guterres “any calls for new investments in hydrocarbons are ‘delusional'”.
CEOs oppose this view, but admit that the transition to renewable energy needs more effort and investment to avoid future crises, whether they are artificial such as the current gas shortage, or real ones.
In Europe, energy costs are up to 15 times higher than in the United States. We cannot continue with this situation. Most European countries are heavily indebted and we need to find a solution to the problem that plagues our energy infrastructure. So we need to invest both in the fastest transition, but also to understand what is in our financial interest and what is not he added.