Us experts say the situation in Ukraine could exacerbate global energy shortages

2022-07-03 0 By

The international benchmark oil price briefly rose above $105 a barrel on Wednesday, its highest level since 2014, as global stock and commodity markets roiled in the wake of major oil producer Russia’s military action in Ukraine.Oil prices fell to $99 a barrel after U.S. President Joe Biden announced new sanctions against Russia that did not target Russian oil and gas exports.Several U.S. industry experts expect oil prices to remain high this year.Us media reported that geopolitical risks “could lead to a rise in global energy prices or exacerbate global supply shortages”, posing risks to economic growth prospects.Ed Hirsch, an energy scholar at the University of Houston, believes Russia could cut off gas supplies not only to Europe, but also to the rest of the world.A worsening situation in Ukraine could send oil prices significantly higher.Europe typically stores gas in the summer for winter, and sanctions on Russian oil and gas may be bearable in the short term, but could lead to an energy crisis in Europe in the longer term, said Katerina Firpenko, an analyst with wood Mackenzie.Texas is a leading producer of U.S. oil and a leading exporter of LIQUEFIED natural gas.Carl Ingham, an economist with the Texas Alliance of Energy Producers, said oil and gas producers in Texas and even the United States could fill some of the void if Russia limits or stops gas exports to Europe.Higher oil prices also mean more profits for Texas oil and gas producers due to increased demand, which is expected to boost the industry’s growth in the short term.But several analysts here believe the boost will be short-term for now, with energy consumers around the world footing the bill for higher energy costs.Texas A&M University economist Eric Lewis said high oil prices are “a bad thing for people who have to pay their electricity bills, gas bills or people who drive cars.”Gabriel Collins, an energy affairs fellow at Rice University’s Baker Institute for Public Policy, said the United States would hurt global energy consumers if it imposed sanctions on Russia’s oil and gas industry, either financially or in concert with its Allies.By targeting Russian oil, Washington “would be targeting their economic centre of gravity, but it could also be targeting the pocketbooks of its own consumers”.Biden has said that while imposing sanctions on Russia, he will try to avoid any significant impact on the U.S. economy, particularly on energy prices.Well-known energy experts, they exceed company vice chairman Daniel yergin recently wrote in the Wall Street journal, although in January this year, the United States exports to Europe’s liquefied natural gas (LNG) for the first time in history more than Russia’s pipeline run, but if Russia completely interrupt gas exports to Europe, America’s natural gas exports to make up for the shortfall,Europe would be in a quandary, having to restart coal and nuclear facilities to generate electricity.Earlier this month, the U.S. Energy Information Administration released its Short-term Energy Outlook forecast that U.S. crude oil production will average 12 million barrels per day in 2022, 760,000 barrels more than in 2021.The report predicts that international crude oil prices will remain high through 2023, pushing AVERAGE U.S. crude production to a record 12.6 million barrels a day.