As oil and gas prices continue to surge, the global energy faces huge pressure and increased demand in production.
This is not unconnected to the Russia-Ukraine crisis which started on 24th February 2022 when Russia launched a military invasion on Ukraine.
Since then, oil prices have continued to skyrocket to over $110 per barrel. This development has led to a transition to the energy industry, thereby leading to a shortage in supply, as well as increase in energy bills.
United Kingdom analysts had earlier warned that energy bills in the country could reach as high as £3,000 a year as a result of the surge in oil and gas prices.
Saudi Aramco CEO, Amin Nasser, who spoke at the world’s biggest gathering of energy industry leaders, the CERAWeek energy conference held in Houston, said the “tragic situation unfolding in Ukraine” is making the global energy crisis worse.
According to him, as oil and gas investments are discouraged, demands are being placed on the energy industry to increase production.
He noted that the production capacity available to ease oil supply shortages is limited, as there are about 2 million barrels or 2% of world demand.
“All energy resources will be needed to support a successful transition, and the demonization of our industry is not helping.
“We need consensus on the essential role of oil and gas with lower emissions, working side-by-side with alternatives to meet the rising global call on energy and deliver on net-zero ambitions”, he said.
He further noted that the Ukraine crisis has exposed limitations of current energy policies and is a bleak reminder of the impact of geopolitics on the fragile energy transition.
Maciej Kolaczkowski, Manager Oil and Gas Industry from the World Economic Forum’s Energy, Materials, Infrastructure Platform, in an interview with Weforum, stated that high energy prices contribute to the increase in the cost of virtually all goods and services, further fuelling inflation expectations.
He further revealed that high prices are being passed over to consumers at the pump, in their gas, heating and electricity bills.
“It is hard to predict which way the situation and markets will go, however it seems that we are poised for a period of high energy prices that are driven by war and combined with tight market fundamentals”, he noted.
