Step.— Energy markets responded to Russia’s invasion of Ukraine on Thursday with soaring energy prices (the global benchmark for oil topped $100 a barrel for the first time since 2014), leading to further gains for the oil industry. Texas oil and gas, at least temporarily.
Energy analysts say the conflict could slow the flow of oil and gas from Russia, one of the world’s biggest producers, to Europe in coming weeks. The price of oil fell back to $99 on Thursday night, after President Joe Biden did not take aim at Russian oil and gas when he announced sanctions against Russia.
Higher oil and gas prices mean more money for Texas producers and could lead to industry growth in the short term, according to Karr Ingham, an economist with the Texas Alliance of Energy Producers.
While Texas oil and gas producers could see increased demand for their products, energy consumers in Texas and around the world will foot the bill for rising global energy costs, analysts said.
“This is bad for people who, for example, have an electric bill, a gas bill, or drive a car,” said economist Eric Lewis, an assistant professor at the Bush School of Government and Service at Texas A&M University, specializing in oil and gas.
Meanwhile, Texas oil and gas producers may fill some of the void if Russia cuts or stops natural gas exports to Europe.
“This may present a set of circumstances where Texas growers can step in and fill the void there,” Ingham said in an interview.
Natural gas is typically shipped abroad in liquid form, and Texas accounts for the vast majority of US liquefied natural gas export capacity between Freeport LNG and Cheniere Energy in Corpus Christi, the two largest LNG export terminals in Texas.
Already this winter, homes across Europe have experienced high energy costs due in part to low energy reserves and lower-than-normal Russian gas supplies. At the same time, a cold winter has boosted energy demand.
For now, European utilities will continue to buy gas from Russia, via Ukrainian pipelines, due to contracts already in place, Bloomberg reported. It is unclear if that will continue as Russian military forces invade Ukraine.
100 dollars reached the barrel in the week
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