A GLOBAL ENERGY CRISIS IS COMINGquanly
The world is facing an energy crisis when the supply of natural gas such as coal and other energy sources does not meet the demand. Natural gas prices have surged in Europe this year, while several plants in China have had to close due to power outages related to a shortage of coal supplies. Meanwhile, the UK has been facing a situation where many of its fuel pumps have run out. India’s power plants are also running with extremely low coal reserves. Before the negative developments of the energy industry in countries around the world, experts predict the risk of an energy crisis that will threaten the global economy.
1. The Cause
For European Countries
- The Covid-19 epidemic situation was temporarily controlled in Europe, businesses and factories simultaneously started to restore the production/supply process and overtime to compensate for the volume of goods/revenue. affected by the epidemic, which simultaneously requires a large amount of energy for production.
- And in the context of the approaching winter, the need to use energy for lighting and heating is increasing, although governments around the world are trying to limit the impact on consumers. , but admittedly they could hardly have prevented their energy bills from skyrocketing.
- In Europe, natural gas is currently trading at the equivalent of $230 per barrel; – up more than 130% since the beginning of September and 8 times higher than the same time last year (according to data from Independent Commodity Intelligence)
For Asian Countries
- In China, a prolonged blackout for people has begun, while in India, power plants are scrambling to supply coal for production and consumption. coal in this country is extremely low.
- Korea Electric Company also announced on September 23 that it will raise electricity prices for the first time in eight years because a sudden cold wave could force companies to buy emergency gas at record high prices. green.
- In East Asia, the price of natural gas has increased by 85% since the beginning of September, reaching about 204 USD/barrel. Although prices are still much lower in the United States, a net exporter of natural gas, they have risen to a 13-year high.
2. Impact of the energy crisis on the econnomy
The frenzy to secure natural gas is driving up coal and oil prices. Prices for natural gas, oil, coal, and other energy sources have hit multi-year highs. For example, the price of natural gas in Europe has increased by more than 400% since the beginning of the year while electricity prices have increased by more than 250%. China’s factory output fell in September for the first time in 18 months, thus stifling the country’s recovery from the Covid-19 pandemic, power was interrupted due to insufficient coal supplies. enough. This energy crisis may upset the balance of supply and demand. Since energy prices affect economic decisions throughout the supply chain, price increases have had a significant impact on economies with many companies in Europe and Asia closing due to refusal to pay their bills. get high energy costs. The situation is worrying central banks and investors. Rising energy prices are contributing to inflation, to maintain the economy against the negative impact of Covid 19, but when the energy crisis occurs, all efforts may be lost.