Some of the main points covered during the discussion:
- Dependence on gas in the electricity mix tremendously varies between countries and regions. For example, Germany’s power uses 15% gas compared to 3% in Poland.
- Fuel switching is mostly common in the electricity sector and depends on the availability of alternative fuels. In Asia, coal is cheap and readily available therefore the switch from gas is likely to increase coal consumption.
- While Russia’s oil market share is decreasing in Europe and increasing in Asia, Middle Eastern producers are adjusting their market shares to account for these flow disruptions.
- There is a small risk that Middle Eastern producers lose their market share in Asia at the expense of Russia, though they have been cementing their position in Asia for instance by investing directly in refineries. Meanwhile, they are sending more oil to Europe. We shouldn’t forget that Middle Eastern crude is the most competitive as it is the cheapest to extract.
- The oil price levels forecasted by major investment banks haven’t materialised due to recessionary fears as well as a less than expected decrease in Russian oil supplies.
“Russia’s oil is in long-term decline – and the war has only added to the problem“, Dr Carole Nakhle, Jul 2022
“Europe’s energy crisis and Norway’s role in breaking the Russian monopoly“, Dr Carole Nakhle, Aug 2022