Chronic. Red alert on world supply, from oil fields and mines to factories and consumers! At the dawn of the year 2022, rarely have so many threats weighed on the world economy: geopolitical tensions, imbalances between supply and demand for raw materials and components, bottlenecks in maritime transport and harbors. Oil and gas, cobalt, lithium, nickel, copper and rare earths, microprocessors and container ships have become rare and expensive. Everything fuels inflation and destabilizes economic players.
In Europe, the immediate concern focuses on energy. Its bill will amount to 1,000 billion euros this year, twice as much as in 2019, calculated the bank JPMorgan Chase. “But if Russia invaded Ukraine, the barrel of oil would explode the ceiling, and there would be a shortage of gas to be expected in Europe”, while it cost four times more in 2021 than in 2020, warned economist Philippe Chalmin by presenting, Thursday, January 27, his “CyclOpe” report, annual barometer of world commodity markets.
The French Minister of the Economy, Bruno Le Maire, dramatizes. The European Union is undergoing “a gas shock comparable to the oil shock of 1973”, which led to an unprecedented spike in electricity prices. From metallurgy to chemicals, whole sections of industry have had to reduce their production so as not to lose money and limit additional costs which will affect the price of cars or foodstuffs.
Lose-lose escalation
The threat to black gold is also worrying – except for supporters of an accelerated exit from fossil fuels. The barrel might quickly go from 90 to 100 dollars (from 80 to 90 euros) – and even to 120 dollars in the event of a Russian-Ukrainian war. Demonizing Russia and its allies in the Organization of the Petroleum Exporting Countries is easy. The oilmen Americans are in no rush to pump more crude. Above all, the sector has cut so much in its exploration-production expenditure, halved since the peak of 2014 (720 billion euros), that excess capacity has melted, while demand has returned to its pre-Covid level. and that it will increase until 2030.
Beyond oil and gas, a military adventure by Vladimir Putin in Ukraine would destabilize the market for metals such as aluminum, nickel or palladium – whether the United States and Europe forbid him to sell them abroad. foreigner, or that he suspends his exports as a retaliatory measure. A lose-lose escalation as it would deprive Russia of foreign currency and its customers of vital products to get rid of coal, oil and gas in transport and electricity generation.
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