{"id":17054,"date":"2022-07-27T16:23:41","date_gmt":"2022-07-27T12:23:41","guid":{"rendered":"http:\/\/geworld.ge\/en\/?p=17054"},"modified":"2022-08-02T10:27:23","modified_gmt":"2022-08-02T06:27:23","slug":"the-energy-crisis-is-global","status":"publish","type":"post","link":"https:\/\/geworld.ge\/en\/the-energy-crisis-is-global\/","title":{"rendered":"The Energy Crisis Is Global"},"content":{"rendered":"\n
It\u2019s not just Europe and the United States\u2014eye-watering prices are wreaking havoc around the world.<\/strong><\/h5>\n\n\n\n

As Russia plays hardball with Europe\u2019s gas supply, the continent is staring down a worrisome energy future\u2014and it\u2019s not alone. For months, sky-high natural gas and oil prices have been wreaking havoc around the world, and experts warn that there is no end in sight as long as the war in Ukraine barrels on.<\/p>\n\n\n\n

From Ecuador to South Africa, fuel shortages and blackouts have plunged import-dependent countries into economic turmoil, leaving desperate governments scrambling for workaround solutions. In Sri Lanka, which was already buckling under mounting crises<\/a>, acute shortages and dayslong lines have forced authorities to issue work-from-home orders. Pakistan has resorted to shortening its work week<\/a> to relieve pressure from lengthy power cuts, while Panama<\/a> has been rocked by demonstrations over surging prices.<\/p>\n\n\n\n

\u201cWe are experiencing the first global energy crisis,\u201d said Jason Bordoff, an energy expert at Columbia University, who noted that the crunch has hit almost all of the world\u2019s regions and energy sources. \u201cThe ripple effects are being seen globally, and I don\u2019t think we\u2019ve seen the worst of it yet.\u201d<\/p>\n\n\n\n

Markets were already tight before Russia invaded Ukraine, the result of a combination of the pandemic, supply chain slowdowns, and climate shocks. That was compounded by curtailed Russian gas exports, which forced Europe to turn elsewhere for its supplies and further drove up prices in the global marketplace. Now, as climate change-fueled extreme heat<\/a> adds more fuel to the fire, these challenges have only deepened.<\/p>\n\n\n\n

\u201cIt\u2019s just an interconnected global system,\u201d Bordoff said. \u201cWhen you put pressure in one place, it is felt somewhere else.\u201d<\/p>\n\n\n\n

The last time the world experienced a disastrous energy crunch\u2014albeit only for oil\u2014it was the 1970s, and OPEC had imposed an embargo<\/a> that sent shockwaves through the oil industry. That crisis birthed the International Energy Agency (IEA) and pushed industrialized nations to develop strategic reserves in preparation for future supply disruptions, said Antoine Halff, an expert at Columbia University\u2019s Center on Global Energy Policy. But many emerging market economies and debt-laden countries don\u2019t have this same cushion, leaving them especially exposed to any disturbances. <\/p>\n\n\n\n

\u201cToday, we have a whole new cast of countries, smaller countries that have been developing rapidly and that have been using more and more energy\u2014and that\u2019s a great sign that reflects their economic development,\u201d Halff said. \u201cBut that also made them much more vulnerable to disruption risks, and they\u2019re not part of that safety net of the IEA.\u201d<\/p>\n\n\n\n

Take Pakistan<\/a>, which has been struggling to cope with power cuts, or Ecuador<\/a>, where deadly protests<\/a> over surging fuel prices and costs brought the country to a near standstill<\/a> in June. In recent weeks, both Ghana<\/a> and Cameroon<\/a> have been gripped by protests over fuel prices and shortages. So have Argentina<\/a> and Peru, where surging energy costs have sparked strikes and demonstrations. <\/p>\n\n\n\n

\u201cThe poorest countries in the world are struggling economically already, are in weak fiscal positions, and are just struggling to afford energy at all,\u201d Bordoff said. \u201cYou\u2019re going to see, I think, worse risk of rolling blackouts and trouble keeping the lights on and the electricity going in parts of the world that are lower income and don\u2019t have stable electricity grids to begin with.\u201d<\/p>\n\n\n\n

Some countries are already in the dark<\/a>. South Africa<\/a>, which is certainly no stranger to load-shedding, has been plagued by rolling blackouts as it grapples with one of its worst-ever energy crises. So has Cuba<\/a>, which was already suffering under widespread power outages. <\/p>\n\n\n\n

To avoid meeting the same fate, other nations have turned back to coal. As the energy crisis deepened in May, India<\/a> pledged to restart coal mines and ramp up production; in June, India\u2019s imports of coal reached record levels<\/a>. And the country could be in it for the long haul, Indian Power Minister Raj Kumar Singh warned<\/a> this month. <\/p>\n\n\n\n

These disruptions are part of a larger picture of how Russia\u2019s invasion of Ukraine has roiled commodity markets and upended the global economy, said Helima Croft, an energy expert at RBC Capital Markets. Beyond energy, the two countries also account for a significant proportion of the world\u2019s wheat exports<\/a> and key inputs for fertilizer production, both of which have been throttled during the war. <\/p>\n\n\n\n

\u201cThis is not just an oil story or gas story,\u201d Croft said. \u201cThis is a story about key agricultural products, a potential global food crisis. This is so potentially politically perilous because it really causes so much misery for so many citizens.\u201d<\/p>\n\n\n\n

As European nations shunned Russia\u2019s oil supply<\/a>, both China and India<\/a> moved to swallow up its cheaper stock, with Moscow now becoming Beijing\u2019s biggest supplier. But their high consumption doesn\u2019t mean China and India themselves aren\u2019t also facing economic losses as a result of the crunch: Even with Russia\u2019s markdowns, both are paying eye-watering prices for their other energy imports. \u201cThere is a financial impact over here that is not fully offset by imports of Russian oil, even if at a deep discount,\u201d said Fernando Ferreira, the director of the Geopolitical Risk Service at the Rapidan Energy Group. <\/p>\n\n\n\n

Those markets could face another shock this coming winter, when a full slate of European measures targeting Russian oil<\/a> is set to kick in. To mitigate a potential spike in prices, the Biden administration has been scrambling to develop a price cap plan for Russian oil\u2014but many obstacles<\/a> stand in the way. <\/p>\n\n\n\n

\u201cWe could be looking at more disruption in the energy market and higher prices for oil come December, depending on how these sanctions are enforced,\u201d Croft said. <\/p>\n\n\n\n

And experts say the future of the crisis is deeply intertwined with the duration of the Russia-Ukraine war, which shows no signs of stopping. \u201cIt\u2019s going to continue as long as this war goes on,\u201d Ferreira said. \u201cWe see no indications that we are nearing an off-ramp here in the conflict.\u201d<\/p>\n\n\n\n

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