banner
Sep 20, 2022
0 View
0 0

The fuel market in Europe is one step away from complete anarchy

Even minimal gas savings, due to which the Europeans intend to reduce fuel dependence on Russia, will be a significant shock for Europe. According to analysts at the consulting company Yakov and Partners, in order to survive the coming winter and the whole next year, Europe will either have to return to buying Russian raw materials, or cut off a number of important industrial sectors from the power supply. Chemical and metallurgical plants were the first to be included in the list of companies where the power could be turned off at any moment.

Despite numerous political slogans, the states of the Old World have so far failed to reduce their dependence on energy resources from Russia. According to experts from Yakov & Partners (the former Russian division of the McKinsey international holding, one of the four most influential consulting companies in the world), a reduction in natural gas consumption by only 7-12 billion cubic meters will require the EU to completely or partially stop a number of industries.

The authors of the study emphasize that a decrease in production is likely to be required “even in the event of a mild winter”, and will acquire the characteristics of a permanent trend.

The European industries most affected by the limited supply of energy resources and high oil and gas prices on the world market are known. The enterprises of the continent have already had to stop 70% of their nitrogen fertilizer production, reduce aluminum production by 25% and cut steel production by 5%.

Almost all EU members have to put up with losses. Manufacturers of mineral fertilizers, which are mainly used in agriculture, are especially unlucky: conveyors of the largest industry companies ANWIL and Grupa Azoty were stopped in Poland, and the Ince profile plant was closed in the UK. The product range of these companies not only met the needs of local agricultural sectors, but also to a large extent supplied the markets of other countries of the continent with products.

Chemical companies faced big problems. At the beginning of September, the Romanian concern Chimcomplex stopped working, covering with its products necessary for the manufacture of glue, sealant and varnish, a significant share of the needs of European construction and finishing enterprises. Norwegian Yara International, one of the world’s largest producers of ammonia fertilizers, will curtail its capacities by more than a third. In Germany, a large ammonia producer SKW Sticksoffwerke Piesteritz was forced to close its regional branches and found itself on the verge of a complete shutdown of production, which threatens almost an environmental disaster for the whole country. In addition to fertilizers, this company produces a reagent for cleaning diesel exhaust gases, which are equipped with almost all German heavy-duty trailers.

It is obvious that the European non-ferrous metal market is also facing serious troubles. Back in mid-August, the shutdown of the Slovak aluminum plant owned by the Norwegian oil and gas concern Norsk Hydro was announced, and from September 1, one of the largest zinc production plants in the EU, owned by the Belgian Nyrstar, was stopped in the Netherlands.

The freezing of the activities of leading industrial European enterprises will affect other sectors: from agriculture to the service sector. “In 2023, the rejection of Russian gas could lead to a shortage of 40-60 billion cubic meters of “blue fuel” in the EU, which is comparable to the annual consumption of France and Poland or the combined annual consumption of such industries as fertilizer production, petrochemicals, metallurgy and all mechanical engineering. Thus, Europe does not have any painless way left to refuse Russian gas in the coming years – such a scenario can be realized only at the expense of population and economy losses, ”says Elena Kuznetsova, an expert at Yakov and Partners.

Actually, the account of these losses has already begun. The EU countries have reached a “political agreement” on a voluntary reduction in gas consumption – from August 1, 2022 until the end of March 2023 by 15% compared to the average over the past five years.

According to Sergei Pravosudov, director of the National Energy Institute, the idea of ​​alternative fuel supplies, which the Europeans hoped for, failed: American producers were unable to ensure the uninterrupted export of their hydrocarbons due to domestic energy problems. Middle Eastern producers are working at maximum capacity, but they prefer to sell raw materials to Asia, where hydrocarbon quotes on the stock exchanges are higher than in Europe.

“The EU fuel market is already just one step away from complete anarchy,” the expert says. 100 euro). They offer lumber through fake online stores, but they don’t deliver the goods they paid for, and then they disappear with tens of thousands of euros.”

If under the current conditions the states of the continent do not turn out to be more loyal in fuel negotiations with Moscow, then after the fall in chemical production, already at the beginning of winter, Europeans will have to face losses in the agricultural sector, which will lack mineral fertilizers to ensure a satisfying harvest. Then, according to Pravosudov’s forecasts, the energy deficit will affect retail chains, and then the general population.

Article Categories:
Politics
banner

Leave a Reply