While Europe is plunged into an unprecedented energy crisis and its security of supply is threatened, the Director General of the International Energy Agency (IEA), Fatih Birol, calls for solidarity between European countries and with emerging economies.
What do you think of the decision of the Organization of the Petroleum Exporting Countries, expected Wednesday, October 5, to drastically reduce its production?
Our world has never experienced an energy crisis of such magnitude and complexity. In this context, raising oil prices further is not the right way to go, it is adding fuel to the fire. This will only accelerate the slide towards a recession which affects emerging countries more heavily than advanced economies.
Moreover, for the first time in twenty years, the number of people without access to electricity will increase this year – there will be 20 million more. Oil and gas producers need to think about the consequences of their decision to push prices higher.
Is Europe ready to face winter?
A few days after the invasion of Ukraine [le 24 février], the IEA presented a plan to reduce Russian gas consumption and prepare for winter. We have made suggestions, such as lowering the thermostat of radiators by 2°C, shortening the authorization periods for renewables, postponing the exit from nuclear power in certain States. Initially, many governments felt this was too radical. But most did.
Today, nearly 90% of European gas stocks are filled. If there are no bad surprises, such as the sabotage of a pipeline or an extraordinarily long and cold winter, I think Europe can get through this winter: the economy will take a hit, but the European Union [UE] can cope if there are no major incidents.
Winter 2023-2024 will also be particularly critical…
Gas stocks are 90% full because Europe still receives some Russian gas and China, the largest importer of liquefied natural gas [GNL] in the world, has imported 20% less than usual since the start of the conflict. But, in February, the stocks will only be filled to the tune of about 25%.
However, next year, there will be no more Russian gas, and Beijing should import more LNG. Nor will there be many new LNG streams on the market. How can stocks be replenished between February 2023 and winter 2023-2024? It will be a big challenge.
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