The biggest energy crisis in the last 50 years - how does it threaten the world?

The energy crisis in Europe is brewingback in the fall of 2021, when prices for natural gas and other energy resources began to rise sharply. This was caused by a reduction in gas supplies from Norway, Russia and the United States. At the same time, local gas production began to decline, as we have already described earlier. In 2022, the situation worsened, moreover, according to experts, the situation will worsen further. As a result, the current crisis could be the most serious in 50 years. That is, the situation will be worse than in the 70s and 80s of the last century. Tim Stewart, President of the US Oil and Gas Association, came to this conclusion. But how will the crisis turn out for the world and what should we prepare for? Let's try to understand this issue further.

The world is plunging into a serious energy crisis

Content

• 1 Energy crisis and sanctions against Russia
• 2 Other causes of the energy crisis
• 3 How to prevent an energy crisis
• 4 Consequences of the energy crisis for the world
• 5 Developed countries are returning to thermal power plants and stove heating?

Energy crisis and sanctions against the Russian Federation

At present, the oil industry has already emerged in the world.crisis, gas crisis, and electricity crisis. It would seem that in the summer the situation could improve, because this is the time when countries have time to accumulate energy resources and prepare for the heating season. However, according to the head of the international energy agency Fatih Birol, a hot summer, on the contrary, can exacerbate the energy crisis.

This is due to the fact that a large amount of energywill go to air conditioning. At the same time, there may be a shortage of gasoline, kerosene and diesel fuel in Europe. But, of course, the cause of the crisis is not only air conditioning. EU countries have already approved another package of sanctions against the Russian Federation, which includes an embargo on two-thirds of Russian oil. For Russia, this threatens to lose $ 22 billion, and for Europe - even more problems with energy resources.

The embargo on Russian oil will aggravate the situation on the energy market

The sixth package of sanctions suggests that throughSix months after its entry into limited force, a ban on oil supplies by sea to the countries of the alliance will come into effect. Eight months later, a ban on the supply of petroleum products will also come into force. True, the restrictions do not apply to supplies via the Druzhba oil pipeline.

Moreover, it exacerbates the situation.self-sanctioning of traders. That is, they do not have an official ban on the purchase of oil from Russia from the West, but they reduce the volume of purchases, fearing public pressure.

The IEA assumes that the total oil supplyfrom Russia will decrease to 9.6 million bpd. Such a low level was last observed in 2004. Fatih Birol, like Tim Stewart, assumes that the current oil crisis will be the biggest in 50 years, and they will last longer than the crises of the 70s and 80s.

Now the prices for gasoline and diesel fuelas high as possible, while their stocks are at the lowest level. But not all experts agree that the energy crisis, which has affected all energy resources, will worsen this summer. According to some analysts, if there is a shortage of fuel, it will not be very large-scale. A really serious crisis will arise only six months later, that is, closer to the end of the year.

One of the causes of the energy crisis is the transition to renewable energy sources

Other causes of the energy crisis

The impetus for the energy crisiswas an attempt to transition countries to renewable energy. As you know, it is based on rather unstable sources, such as wind and sun. As it turned out, the world is not yet ready to completely abandon traditional energy sources. In addition, climatic factors also played a role. For example, in Latin America, the energy crisis arose against the background of a severe drought, which affected the operation of hydroelectric power plants.

A difficult situation has also developed in China, where, due tofloods flooded at least 60 coal mines. In addition, the fight against emissions and tightening environmental regulations have led to the closure of many coal mining companies. Egypt faced a shortage of gas for a different reason - as a result of the hostilities, sections of the transit gas pipeline that runs through Syria were damaged.

Countries such as the United Arab Emirates could make up for the oil shortage by increasing production

How to prevent an energy crisis

There are several factors that willavoid a crisis or at least minimize its consequences. For example, the situation on the energy market may improve if it is possible to conclude a nuclear deal with Iran and, accordingly, increase oil supplies. It will also have a positive impact on the situation if China reduces the volume of purchases due to the weakening economy.

The Arab OPEC+ countries will be able to partially compensate for the shortage of oil and oil products if they can increase production volumes. However, relying on all these factors is not yet worth it.

Consequences of the energy crisis for the world

Rising energy prices and fuel shortageswill affect all countries, and especially those that do not have the necessary reserves. First of all, heating and electricity will rise in price. Following them, prices for all goods will rise. In fact, this process has already begun in many countries.

The rise in prices may affectfood - meat, grains, as well as vegetables and fruits. Farmers are already seeing a rise in fertilizer prices. It must be said that a food crisis in the world is planned even without an energy crisis. The latter will only make it worse. The world is already on the verge of a bread shortage.

The world may be overwhelmed by unemployment and hunger

Also from the energy crisis stronglymetallurgy, production of building materials and mechanical engineering will suffer. In addition, it will also affect other industries, such as the production of household appliances, electronics, automotive, etc. Traditionally, a catastrophic situation will develop in the poorest countries, which are likely to be affected by famine. But the rich countries will also be overwhelmed by unemployment, inflation and shortages of certain products.

NZT Rusfond CEO Igor Shimkobelieves that the energy crisis will inevitably lead to stagflation. This is a situation that arises as a result of inflation and the depressed state of the economy. It leads to the fact that consumers will not be able to buy goods and services in the volumes they need. How long will this situation last? No one can accurately answer this question yet, but the conclusions of experts are not comforting. The crisis, in their opinion, will be long.

Are developed countries returning to thermal power plants and stove heating?

More and more countries are talking about returning tocoal generation. Among the first is Great Britain, which is seriously discussing the launch of a thermal power plant. Even Australia has planned the commissioning of previously closed coal-fired power plants. This was stated by the country's Minister of Resources Madeleine King. According to him, it was the closure of coal-fired power plants in 2020 that became the main cause of the energy crisis in the country.

According to him, operators should return tobuild the power plant as soon as possible so that Australia has an additional 30% of energy capacity and can survive the winter. Obviously, many countries will follow suit. In addition, European countries rich in forests are counting on wood-burning stove heating to help them survive the next winter.

Heating with wood this winter is a real prospect for some European countries

For example, the Polish government has proposedfree of charge for citizens to collect branches in state forests for heating houses. The inhabitants of Estonia have the same opportunity, however, and the collection of branches here is still paid. The use of firewood for heating is also expected to be popular in Finland and Sweden. For example, in Finland, houses usually have fireplaces, which were previously used daily by citizens during the cold season.

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However, afford the luxury ofheating homes with wood, not all European countries can do it, since not all have forests. In addition, over the past few years, the price of firewood has increased several times. Therefore, the preparation of firewood for the winter for Europeans, who are less well off, can be an overwhelming task.

But, in any case, as we see, the struggle withglobal warming has faded into the background. The energy crisis is now perceived as a more real and serious threat. This means that the temperature will continue to rise on the planet, which will subsequently lead to environmental, climatic, economic, food and other problems.