EU countries are facing skyrocketing gas prices and energy shortages. The deficit has pushed up heating bills, jeopardized the productivity of European companies and boosted household spending by 7% this year, according to the IMF, according to Al Mayadeen.
But, as the World Economic Forum notes, the energy crisis in Europe began even before the Russian military operation: last year about 7% of the population of the European Union could not heat their homes.
According to Eurostat, Bulgaria became the most “energy-poor” country at that time, where almost one in four citizens could not heat their homes. Followed by Lithuania (22.5%), Cyprus (19.4%). Surely, the results of the outgoing year should be much worse.
Meanwhile, although the European Union has managed to fill its gas storage facilities by 95.5% before winter, the IEA predictions remain valid: Europe’s toughest challenge will be launched next year, on 2023.
Head of the International Energy Agency Fatih Birolpresenting a report on the balance of supply and demand in Europe for 2023/2024, it is already alarmingly ringing all the bells.
According to the organization’s estimates, Europe may face a shortage of up to thirty (!) billion cubic meters of natural gas. Yes, and the volume of supplies may be reduced next year, if the supply of gas through Russian pipelines is completely stopped.
Competition will quickly increase due to a surge in Chinese imports next year, especially in connection with the lifting of anti-COVID restrictions.
Vice President, Energy and Raw Materials, Kairos Research Augustine Pratt notes in relation to upcoming problems: “Currently we cannot do without LNG. The growth of the natural gas market in Europe has been rapid and it is not over yet”.
According to the New York Times, the price of a shipment of liquefied natural gas that sold two years ago for about $20 million rose to $200 million last summer.
Forty billion-dollar LPG tankers off the coasts of Europe and Asia are waiting for the cold to set sail for countries willing to pay the ultimate price.
The number of LNG carriers bound for Europe has more than doubled since last year to compensate for disruptions in Russian gas supplies, and most of them come from the United States, which has become one of the world’s largest LNG exporters alongside Qatar and to Australia.
In 2022, deliveries to Europe from the United States more than doubled, from Qatar by about 20%, and Russia, despite the suspension of gas supplies via pipelines, increased its exports by about 10% in 2022, according to the Parisian company Research Kairos.
The crisis in Ukraine has proved highly profitable for large gas companies able to incur multibillion-dollar costs to build liquefaction plants (gas must be cooled to minus 260 degrees Fahrenheit to liquefy).
Thus, the American Shell had the largest LNG portfolio last year. According to the company, in the first nine months of 2022, profit was $10.1 billion, double from the same period a year earlier. TotalEnergies, Cheniere Energy, ExxonMobil also did well.
The net profit of the world’s largest LNG carrier (Qatar) in the third quarter of 2022 increased by 10.3% year on year.
It turns out that Europe’s energy crisis has become predictably lucrative for some and expensive for others.
The usual thing. Nothing personal: just business wrapped in a glossy film of high-profile phrases about democracy, human values and caring for frozen old Europe.
