Energy

Oil Executives Warn That Next Winter’s Energy Crisis Could Be Even Worse

No featured image available

Energy CEOs are warning that fuel shortages and skyrocketing electricity costs that the world is already facing will be far more pronounced in winter 2023 as the international market will have even less access to Russian energy, according to CNBC.

Households in the U.S. and Europe are struggling to pay exorbitant utility bills and face the prospect of blackouts as natural gas supplies remain tight with winter fast approaching. However, the crisis could drag on and become even worse during 2023’s winter months as the European Union will have fully banned Russian crude oil and previously imported Russian gas supplies will have likely run out, CNBC reported.

“We’ve got a difficult winter ahead, and subsequent to that we’ve got a more difficult winter in the year ahead of that because the production that is available to Europe in the first half of 2023 is considerably less than the production we had available to us in the first half of 2022,” Russell Hardy, CEO of oil trader Vitol, told CNBC Monday during a panel at an energy conference in Abu Dhabi.

Europe’s natural gas storage is around 90% full; however, a large proportion of its stockpiles were imported from Russia in previous months, according to CNBC. Additionally, gas was easier to buy because China, a huge fuel consumer, was importing far less gas due to its strict coronavirus lockdowns that slowed the nation’s economic activity.

Russia’s share of the international energy market is predicted to severely decline and will never recover to its 2021 levels, meaning that other countries will be needed to fill supply gaps, according to the International Energy Agency. Russia was responsible for nearly 20% of internationally traded energy in 2021; however, its share has been declining due to Western sanctions that were levied following the invasion of Ukraine.

Global energy prices are already approaching “unaffordability,” with some people already spending half or more of their disposable income on energy, British Petroleum CEO Bernard Looney told CNBC.