The global energy industry plays a very important role in modern society. At the advent of new technology and continuous growth of population, it is now more important than ever before. Until 2019, global energy consumption was soaring, with exceptions in 1980 and 2009. However, during Covid-19 pandemic in 2020-‘21, global energy consumption dropped sharply. The energy demand fell by around 20%. It has been the lowest in 70 years. Consumption of electricity in households increased following imposition of lockdowns. Still then it was not enough to counteract the fall in demand due to decreasing electricity usage in offices which remained shut due to the lockdowns.
When the pandemic finally ended, Russia announced a war on Ukraine further escalating the damage to recovering economies and the global energy industry. The US and the EU started to impose sanctions on Russia to retreat and end the war. However, there are loopholes in the sanctions since Russia is a major player in the global energy industry. Russia’s exports substantially consist of natural gas. It is the third largest provider of energy after the US and China.
The war has resulted in a skyrocketing prices of commodities, including energy supplies which has devastatingly affected the developing and low-income countries. Income globally has reduced by 0.7%, with low to middle-income countries seeing a 1% decrease and high-income countries seeing a 0.6% hit, half of the decline due to rising energy prices. Most Asian countries are growing economies and heavily dependent on Russia for its energy demands. These countries have seen a crash in stock prices since the war started. On the other hand, this has created new opportunities for Middle East countries such as Qatar as Europe and America are trying to find other sources for energy imports.
The EU plans to increase liquid natural gas imports from the US and Qatar. They are also scaling up on renewals and implementing policies to help decrease the consumption of carbon-containing fuels to reduce carbon emissions.
Since the EU and the US are looking for alternatives to energy imports. This is affecting Russia’s energy exports and it will have to decrease its energy production soon as they do not have enough storage to store the oil and gas that it is unable to sell. Consequently, Russia will no longer remain a superpower in energy industry. As mentioned before, due to the sanctions, Russia’s exports are dwindling, resulting in its plummeting revenue.
Syeda Madeha Mowla, an undergraduate