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The blues of countries dependent on gas and fossil fuels
After experiencing double-digit growth in 2021, international trade will experience a abrupt halt during this exercise. The World Trade Organization (WTO) has warned that trade will slow and inflation will continue to rise This year. In question the energy that tows many other businesses including food.
The reason can be found in the effect of the crisis in Ukraine, also combined with the new wave of Covid that is hitting China and which is already causing disruptions in transport and supply chains. But if the WTO leaves little room for optimism in its document, there are, however, a few countries to take advantage of these facts and particularly of the crisis in Ukraine.
The latter has obviously upset the situation of international trade and particularly that of energy. The prices of gas, coal, oil and other raw materials soared and triggered geostrategic movements resulting in winning and losing countries. A real blues of dependence on gas and fossil fuels at the ” Jean who laughs and Jean who cries “.
The United States has already greatly increased its presence in Europe by offering the gas that the Old Continent wants to stop buying from Russia. Venezuela, Qatar, Algeria, Norway and China also benefit. In the short term, the most dependent countries are losers. Indeed, the conflict in Ukraine, beyond its human tragedy, has enabled the countries of our planet to indulge in a major auction for these hydrocarbons. 2021 had hinted at some premises as to the effects of the great post-crisis economic recovery.
But the Russian-Ukrainian conflict has increased tensions, even threatening potential shortages of many energy resources, especially in the West. Brent prices are a good illustration of this hustle and bustle. Two years ago at the same date, when the world was confined, a barrel of oil was worth 28 dollars on the international market, today it costs 129 dollars. Gas or coal are not to be outdone and the rise in the prices of the main energy resources makes Westerners think twice before turning on the heating in the house, running the washing machine, taking a shower hot or turn on the oven…
This situation forced the big Europeans to react. The first step was to look for alternative suppliers to Russia. The reaction of the United States has been to increase their gas sales to Europe and to release part of their strategic oil reserves, in order to bring down prices, in addition to their pressure on countries such as Venezuela or Iran.
Venezuela has the largest oil reserves in the world, but is unable to exploit them due to the deplorable state of its economy. Iran is one of the largest gas producers in the world, but it is embargoed due to its nuclear policy. This being the United States, like the main oil-producing states of the Persian Gulf (Saudi Arabia, Iraq, United Arab Emirates, etc.), which for their part have seen their income increase tenfold. In Europe, Norway has multiplied them by six in a few months.
Gas is the epicenter of the crisis facing the planet. The threat of a cut has tripled the price of this hydrocarbon on the European market since the start of the conflict. Russia is the second largest producer, just behind the United States, which generates a huge dependence vis-à-vis Europe. Of the major eurozone countries, Germany and Italy are the most tied to gas from the Russian Federation. Spain and France to a lesser degree are less dependent on gas from the Yamal Peninsula, including Russia, which is financed by Europeans. The United States, the world’s largest producer of natural gas, are undoubtedly the biggest winners in this conflict, even benefiting from the sharp increase in the price of coal. But not only ! in this mad race for energy, China also appears to be another “big winner” in this situation.
The Middle Kingdom, which has the largest solar energy production capacity in the world, with 253 GW of installed capacity at the end of 2020, is negotiating with Russia for new gas supply routes in the medium term, taking advantage of the termination of contracts with Europe. Ultimately, the main energy-producing countries (China, United States, Qatar, Norway, Venezuela, Algeria, etc.) are getting richer at the expense of the most dependent countries, such as those in Asia, Africa and Europe and in particular Italy or Spain in this continent.
The latter is trying to take advantage of the crisis to redouble its connections with Europe in order to develop green hydrogen. The conflict in Ukraine has paralyzed the ecological transition that Europe was pursuing and has jeopardized the major emission reduction objectives to which Europe had committed itself. ” For this reason, EU countries are trying to accelerate their green investments “, underlines the Spanish media “El Mundo“ which reports these facts.
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