fun fact<\/a>: most oil and liquid natural gas (LNG) shipments from the Gulf to Europe will stop next week.<\/p>\nAfter that, Europe faces an undefined period of severe shortages\u2014primarily in oil, but also in refined products like jet fuel, diesel, and other materials such as fertiliser and helium used in chip production.<\/p>\n
Zooming in on oil, Wall Street analysts are already preparing for oil prices above $200 a barrel, in which case a global recession would be almost certain. <\/p>\n
Comparisons with the energy crisis of 2022 are unavoidable. But price increases this time around could be just the first stage.<\/p>\n
Where Russian gas and oil could be replaced relatively quickly, the current supply shock is more than ten times as big. <\/p>\n
Compared to roughly one million barrels of oil lost to the market in 2022, today\u2019s shortfall amounts to around 11 million barrels.<\/p>\n
This is literally irreplaceable. <\/p>\n
The truly generational impact, as commodity analyst Rory Johnston (who describes himself as an optimist) has argued since early March, is that prices will rise to such levels that people are simply going to have to stop buying fossil fuels altogether.<\/p>\n
In Europe, that means poorer households start cutting back first.<\/p>\n
Globally, it means poorer countries will dramatically cut back on fuel imports, something that is already beginning to happen in parts of South and Southeast Asia.<\/p>\n
Bangladesh has shut all public and private universities. Pakistan has urged cricket fans to watch matches from home to conserve fuel, and in India, some restaurants have stopped serving rice.\u00a0<\/p>\n
Across Asia, flights have already been cancelled. And the disruption is spreading to Europe. The UK is set to receive its last tanker of jet fuel from the Middle East this week.<\/p>\n
Danish energy commissioner Dan J\u00f8rgensen tried in vain to convince EU ministers not to respond to a looming fuel shortage by subsidising fuel consumption, and instead to focus on getting people to use less of it.<\/p>\n
\u201cThe European Union\u2019s security of supply remains guaranteed. But we must be ready for a potentially prolonged disruption of international energy trade,\u201d he said on Tuesday. \u201cNow more than ever it is extremely important that we act together.\u201d<\/p>\n
But national governments are mostly waiting for Brussels to come up with solutions. <\/p>\n
Meanwhile, many, if not most, EU countries have set up generous fiscal support measures for fuel consumption, which only postpones the inevitable and will make matters worse, not better.<\/p>\n
\u201cNo one wants to talk about rationing. It\u2019s not pretty economic policy,\u201d economist Isabella Weber argued<\/a> on social media. \u201cBut the ugliest form of rationing is rationing by price explosions. It\u2019s high time for emergency rationing protocols. Shortages are already here.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"EUobserver voice\u00a0is a daily opinion piece by EUobserver staff writers, published every weekday morning European energy ministers gathered…\n","protected":false},"author":2,"featured_media":558710,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[47],"tags":[247834,192,247837,247840,247835,247838,79,247836,247839],"class_list":{"0":"post-558709","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-environment","8":"tag-typedefinedterm","9":"tag-environment","10":"tag-identifier4420","11":"tag-identifier4599","12":"tag-nameenergy","13":"tag-nameeuobserver-voice","14":"tag-science","15":"tag-termcodeenergy","16":"tag-termcodeeuobserver-voice"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/558709","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=558709"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/558709\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/558710"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=558709"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=558709"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=558709"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}