- Oil major Shell warned that Europe may have to brace for a string of winters with exorbitant power bills as a result of natural gas prices and electricity rationing as Russia continues to squeeze Europe’s gas supplies.
- Relief packages, while welcome, also come at a time when prices are rising and the European Central Bank is under tremendous pressure to raise interest rates, as the euro caves against a surging dollar.
Oil prices may be moderating, and Americans may be enjoying some relief at the pumps, but across the pond in Europe, things are challenging to say the least.
Facing a sharp rise in power bills driven by skyrocketing gas prices Europe is bracing for further Russian gas supply cuts in retaliation for western sanctions over its invasion of Ukraine.
Oil major Shell warned that Europe may have to brace for a string of winters with exorbitant power bills as a result of natural gas prices and electricity rationing as Russia continues to squeeze Europe’s gas supplies.
Shell CEO, Ben Van Beurden, stressed in a conference that Europe is likely to have a number of winters where Europe will have to somehow find solutions through efficiency savings, rationing and a quick build out of alternatives.
Last month, Van Beurden warned that energy markets are likely to remain tight, with supply to be constrained and prices volatile “not only for the remainder of this year but well into next year.”
With the Russian invasion of Ukraine stuck in a stalemate, and neither side able adequately resourced for a meaningful final battle, Europeans are bracing themselves for a long and hard winter ahead.
Moscow has managed to find alternative markets for its various energy products as China and India, two major consumers, have elected not to go along with western sanctions.
Brussels is looking at steps to bring down power prices and governments across the European Union have already set aside some US$278 billion in relief packages to help citizens manage soaring costs of living, but these packages come at a tricky time for policymakers.
Europe is struggling with the hottest inflation in decades and incumbent governments are now starting to look shaky, with Italy’s prime minister one of the first political victims to soaring prices.
Relief packages, while welcome, also come at a time when prices are rising and the European Central Bank is under tremendous pressure to raise interest rates, as the euro caves against a surging dollar.
