Bloomberg: Europe lost $1 trillion from rising energy prices

Europe has lost about $ 1 trillion due to a sharp increase in energy prices in connection with Russia’s special operation in Ukraine, calculated Bloomberg agency.

The agency notes that after the winter of 2022-2023, Europe will have to build up gas reserves with virtually no supplies from Russia, which will increase competition in the field of tanker transportation. The tension in the energy market is likely to continue until 2026, when additional production capacity in the US and Qatar becomes available.

European governments have cushioned the blow to businesses and households with some $700 billion in support, according to Brussels-based think tank Bruegel, but the state of emergency in the region could last for years. “With rising interest rates and a likely economic downturn, the support that cushioned the blow for millions of households and businesses is becoming increasingly unaffordable,” Bloomberg said in a report. As the newspaper notes, the budgetary capacity of the countries is severely depleted – about half of the EU member states have a debt exceeding the block limit of 60% of GDP.

With reference to data from the International Energy Agency, Bloomberg reported that the EU managed to reduce gas demand by 50 billion cubic meters. m in 2022, but the region still faces a potential shortfall of 27 bcm. m in 2023, taking into account the reduction of Russian supplies to zero and the return of Chinese imports of liquefied natural gas (LNG) to the level of 2021. According to the China National Offshore Oil Corp. Institute for Energy Economics, Chinese gas imports in 2023 may exceed this level. year 7%. Thus, China can compete with Europe in the fight for supplies. Other countries, such as Japan, are also striving to build up reserves, writes Bloomberg.

The energy crisis in Western countries is caused by a reduction in Russian energy supplies to Europe, as well as sanctions against the Russian Federation in the energy sector. EU authorities have repeatedly recognized that Europe is in for a difficult winter. At the same time, they do not plan to lift the sanctions, explaining the problems that have arisen at the cost of Europe’s independence from Russia and its energy resources.

The EU countries also agreed on a $60 per barrel price cap for Russian oil on December 3, which came into effect on December 5. In addition to the EU countries, the G7 countries, Norway and Australia also joined the ceiling.