Energy Crisis in China
World gas prices soared in 2021 and even reached the highest increase of 146% on October 6, 2021, in the Henry Hub Natural Gas market. and began to spread to other countries such as China.
The Governor of Indonesia for the 2015-2016 Organization of the Petroleum Exporting Countries (OPEC) Widhyawan Prawiraatmadja said, at least several factors caused this condition. Another factor was that Europe was very
dependent on gas amid pressures towards "clean energy" by abandoning coal. This creates the perfect conditions to push gas prices up very high.
Seeing the high prices rise, it's not worth it if you don't discuss who will benefit the most from the skyrocketing gas prices. But before that, it's not good if you don't see which country produces the world's largest gas.
Based on BP Statistical Review 2021, the United States (US) is the country that has the largest gas producer in the world with a total production of 914.6 million cubic meters. Uncle Sam's country has a market of 23.7% of the total natural gas production in the world.
Russia is in second place with a total production of 638.5 million cubic meters in 2020. This country contributes 16.6% of the world's total natural gas production.
Next is Iran in third place with a production of 250.8 million cubic meters. Followed by China with a total production of 194 million cubic meters and Qatar producing 171.3 million cubic meters of natural gas in
2020.
On paper, the US and Russia are benefiting from rising world gas prices. However, considering the energy crisis in Europe, Russia is the one who will benefit more because the supply of the Red Bear Country is recorded at 43.4% of the total gas use in Europe.
Meanwhile, the US has become one of the victims of the energy crisis. This is due to the natural gas deficit due to the growth in energy demand which generally outpaces the supply growth.
In Russia, the gas price of the superpower has increased by 113.07% from January 2021, even if measured from the lowest price in June 2020, the increase has reached 880%. Currently, the price of Russian natural gas is US$ 15.49 / MMBtu (Million Metric British Thermal Unit).
Europe is indeed very dependent on imports of natural gas coming from outside the block because domestic production is declining. Data from the Eurostat statistical office shows that this block will have to import almost 90% of its natural gas from outside the block in 2019, one of which is from Russia.
"Europe's tight squeeze is in Russia's favor and could smooth out Russia's ambitions of the controversial Nord Stream 2 gas pipeline project to bring more gas to Europe via the Baltics," said a market analyst.
Nord Stream is an US$11 billion Russian and German project. Currently, the project is stalled as the US opposes it, warning of "European energy security dangers".Russia is said to be using its energy supply to exert influence in Europe. Most recently, the US even sanctioned the companies involved, in May 2021.
Previously, Europe had blamed Russia for the high price of gas. The European Parliament "accuses" Russian gas company Gazprom of manipulating gas prices.
In the indictment, lawmakers said the reduced gas flow was an attempt by Moscow to pressure Europe into activating the Nord Stream 2 gas pipeline.
"All these factors make it possible to suspect that the record spike in natural gas prices in Europe in recent weeks may be a direct result of deliberate market manipulation by Gazprom," the letter said.
A Kremlin spokesman gave a statement supporting the opening of the Nord Stream 2 gas pipeline on the pretext of balancing gas prices.
"The rapid activation of the Nord Stream 2 gas pipeline from Russia to Germany will offset high gas prices in Europe, including in the spot market," Kremlin spokesman Dmitry Peskov told Reuters.
Vladimir Putin has shied away from accusations of manipulating gas prices by the country he leads from European politicians. Putin blamed Europe's choice to buy gas on the spot market instead of
a long-term scheme. This, Putin said, was a mistake. The energy crisis is still happening in China. Since last Friday (15/10/2021), gas prices have soared due to cold weather.
At that time, January's most active Zhengzhou thermal coal futures contract CZCc1 hit a record high of 1,669.40 yuan (US$ 259.42 or Rp 3.6 million) per tonne. This figure has increased by more than 200% this year. The continuation of long-term contracts with exporters of liquefied natural gas (LNG) from the US.
These talks are said to result in a deal worth tens of billions of dollars that will boost China's LNG imports from the US in the coming years. Previously, gas trade between the two countries had stopped briefly during the 2019 China-US trade war.
"As a state-owned company, all companies are under pressure to maintain supply security and recent price trends have greatly changed the image of long-term supply in the minds of leaders," said a Beijing-based trader,
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ekonomi