The world is hit by the first truly global energy crisis

We could see that the situation in the energy sector is tense from our earlier articles. Now Fatih Birol, who is the Executive Director of the International Energy Agency (IEA) has declared that the world has been hit by the first truly global energy crisis.

Countries are struggling for their energy security

With supply shortages coupled with high prices, we can see great efforts by all countries to ensure their own energy security regardless of other risks. At the same time, however, various energy export quotas, such as those in the US, are constantly being adjusted, causing a very turbulent period.

At the same time, the way of looking at different types of energy production is opening up and perhaps accelerating. The fact that most fossil fuels are subject to export rules and are often subject to sanctions or political cover-ups means that we can see a strong drive by countries to own other sources of energy.

Global oil & gas sector income is set to jump to an unprecedented $4 trillion in 2022, driven by today’s high energy prices.

But clean energy investment is set to make up only around 5% of oil & gas companies' capital expenditure. Much more is needed → https://t.co/aZV6OhGQOy pic.twitter.com/EgGaXWRiWS

— International Energy Agency (@IEA) October 25, 2022

Is the situation playing into the hands of clean energy sources?

In the current situation, a large number of countries are returning to their own production of, for example, nuclear energy. The US has commissioned a survey to see if smaller nuclear reactors can be put in coal-fired power plant sites.

Another report came from Japan, which is restarting its nuclear power plants for the first time since the Fukushima disaster. The next news came from Europe, with Poland announcing that it wants to build its first nuclear power plant.

Nuclear power has a unique opportunity to stage a comeback in response to the global energy crisis, soaring fossil fuel prices, energy security challenges & increased climate ambitions.

More in our report on Nuclear Power & Secure Energy Transitions 👇 https://t.co/FnHIv6hag3

— International Energy Agency (@IEA) October 25, 2022

In terms of energy production from other sources, we would highlight the huge wind power project planned in China or the first planned hydrogen corridor in Europe.

The situation in the LNG market is also tense

LNG has become a more prominent topic following the restriction of Russian gas supplies to Europe. Suddenly, large quantities of LNG have started to arrive in Europe to partially cover the supply shortfall. Recently, however, it has become apparent that Europe has limited capacity to unload LNG from ships at ports.

There is a risk that, if the situation is not resolved in Europe, LNG ships will take their cargoes to Asia, for example, where China in particular has recently shown great interest in the commodity.

Read also: France as the leading producer of Lithium in Europe?

The situation is also not helped by the OPEC+ group’s decision at the beginning of October to cut oil production by 2 million barrels per day. Birol sees this as a very risky move for the world market.

“It is risky because several economies around the world are on the verge of recession. And considering the global recession, I find this decision really unfortunate.”