The gas crisis in Europe… the most prominent losers and beneficiaries

Europe is facing an unprecedented shortage of gas supplies, the most serious in decades. On the other hand, the exporting countries are benefiting from the rise in international gas prices.

Gas prices have doubled several times since the beginning of the Corona pandemic and so far in Europe, putting the old continent before a number of critical challenges affecting various sectors, with the increase in demand for liquefied natural gas around the world.

Gas prices have risen by nearly 400% this year in Europe, driven by declining inventories as demand increases as industrial economic activity returns. Estimates from the International Energy Agency indicate that prices may continue to rise during the next month and before the onset of winter, which increases pressures on consumers.

Energy-intensive industries are also facing a crisis that is exacerbating day after day with the escalation of the gas crisis, especially in the old continent.

Dimensions of the crisis

The CEO of the Corum Center for Strategic Studies in London, Tariq Al-Rifai, explains the dimensions of the natural gas crisis in Europe, explaining that the world is witnessing a significant rise in fuel prices, and that record increases in the price of gas directly affect many countries in Europe in particular.

While the price of gas futures contracts in Europe witnessed unprecedented increases, Al-Rifai attributed these rises to several main reasons; The first of which is the strong economic recovery the world is witnessing after the Corona pandemic, which closed factories and major companies, explaining that “the industrial sector in Europe in particular, especially in Italy, Germany and France, began to return significantly after Corona stopped, which led to a high demand for gas. Meanwhile, production rates remain unchanged.

And the expert in European affairs explained, in his statements to “Sky News Arabia” that European countries depend on Russian gas by 35 percent, pointing to the control of the Russian company Gazprom on the gas market in the old continent, and at a time when Moscow is seeking to raise its stock of gas before In the winter, European countries are racing against time to fill their reserves of gas ahead of the same season.

Russia

Russia’s production of gas amounts to about 669 billion cubic meters, while its exports amount to 197 billion cubic meters, as the largest exporter of gas in the world. And “Bloomberg” quoted analysts at the beginning of the week, news about the direction of the Russian company Gazprom to raise its expectations about the price at which gas will be exported to Europe and Turkey during the current year, from 270 dollars to between 295 and 330 dollars per thousand cubic meters. Russia expects to increase its supplies to Europe, Turkey and China to 197.3 billion cubic meters this year.

At the same time, the CEO of the Corum Center for Strategic Studies in London drew attention to the great damage to the natural gas-dependent sectors in Europe, stressing that Britain and Italy are among the European countries most affected by this crisis. At the same time, he points out that no country is benefiting from this crisis, including Russia, given the economic effects of the gas crisis in Europe that affect everyone, and contribute to the disruption of economic indicators with raising inflation rates, and other problems such as what the transport sector has been exposed to, for example. For example, in some European countries.

The Organization of Arab Petroleum Exporting Countries expects natural gas prices to continue to rise, with increased demand and a decline in stocks in European markets, warning at the same time of the consequences of turning the gas crisis into a global one.

The main beneficiaries

Considering that “the misfortunes of a people are benefits for a people,” this crisis is seen as an “opportunity” for exporters, who are preparing to seize the opportunity to achieve exceptional gains during that crisis, by taking advantage of the global rise in gas prices, led by Russia, and the United States of America, Norway, Australia and Canada will join the list. Netherlands, Malaysia and Algeria.

In this context, economic expert Dr. Ali Abdel Raouf Al-Idrissi said, in exclusive statements to “Sky News Arabia”, that there are countries that are of course benefiting from the gas supply crisis facing Europe, led by the producing and exporting countries of natural gas. He explains that the “geographical factor” plays an important role in this matter; A country like Australia, for example, is one of the largest exporters of gas, but the geographical factor is not in its favor, given the cost of transportation, which is an important and key part of any economic feasibility.

Al-Idrisi points out that a country like Egypt can benefit from this crisis as well, especially since Cairo has been able to achieve self-sufficiency in natural gas and has an export capacity, and therefore “Egypt, as a geographical location and clear capabilities, can benefit from the rise in gas prices on the whole.” The global level, especially in light of the existence of political and diplomatic relations with the countries of the European Union, which is reflected in the economic and trade relations.”

He explains that the European Union countries are primarily industrial countries and depend on energy very heavily, and therefore, “the current crisis can enhance Egypt’s role and return to it positively, as well as the countries of Europe that are groaning with the lack of supplies.”