Is the war waged in Ukraine by Russia precipitating the world towards a third oil shock? Doubt is no longer allowed. “In 1973, the first shock was triggered by the Yom Kippur War amid growing tension in the oil market and the Iranian revolution led to the second shock in 1979,” recalls Olivier Appert, adviser to the French Institute of International Relations (Ifri).
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The barrel has been fluctuating for a few days between 110 and 120 dollars, up more than 40% since the start of the year.
Prices at their highest since 2014
The weight of Russia in the production of hydrocarbons largely explains this outbreak. The country is among the top three producers of gas and oil, and sixth for coal.
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“The markets anticipate that the sanctions against Russia will eventually affect the energy sector and are looking for other sources of supply, even if it means paying a lot more for them. This is what explains the rise in prices, indicates Nicolas Leclerc, co-founder of the firm Omnegy.
The other major producing countries are indeed unable to provide additional capacity at short notice to replace the 7 million barrels exported each day by Russia, of which 4 million go to Europe. Several major OPEC members, such as Angola, Nigeria and Saudi Arabia, are still below their production quota, while prices are at their highest since the summer of 2014.
Lack of terminals
Almost everywhere in the world, the demand for oil is picking up due to the economic recovery. But the offer does not follow. “Since 2014, investments in upstream oil and gas have been halved, due in particular to the withdrawals made by the major Western companies”, emphasizes Olivier Appert.
The only rapid increases in production could come from unconventional hydrocarbons in the United States. But not in proportions likely to replace the Russian offer. Shale oil production is expected to increase by 600,000 to 700,000 barrels per day (bpd) this year.
The export of shale gas is, for its part, limited by the lack of terminals which liquefy the gas at -161°C. This gas is then sent by ship to Asia and Europe. US President Joe Biden has also pledged to limit the number of drilling for environmental reasons.
Even if the gas shock has already been perceptible for several months, the benchmark index in Europe (TTF) thus reached an all-time high on Wednesday March 2, at €194.7/MWh. Twelve times more than a year ago.
In recent days, it is also the rush for coal, which can easily serve as a substitute for gas to produce electricity. The ton rose to 460 dollars, Thursday, March 3, a level never seen. It was worth $230 on February 28 and $105 in early January. The situation is particularly worrying for Germany, which imports more than half of its gas and coal from Russia.
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“Historically, a barrel above $100 has always led to recessionary shocks,” estimates Matthieu Auzanneau, the director of the research firm The Shift Project. In France, the consequences of the war in Ukraine are being felt at the pumps. “When we see the evolution of the price of a barrel in recent weeks, the impact can already be estimated at around twenty cents on a liter of fuel”, notes Olivier Gantois, president of the French Union of Petroleum Industries (Ufip).
On the other hand, there is no risk of shortage. Russian oil represents only 10% of French crude imports and 18% of diesel. For gas, it’s around 17%.