Energy analyst at research and consulting firm ‘Economist Intelligence Unit’ Nicholas Daher predicted, in an interview with “Al-Arabiya”, that energy demand will register a weak growth during the year in course.
Daher said, “We expect global demand to grow by about 1 percent questyear since the war in Ukraine has negatively affected this growth on the one hand and the increase in energy prices in 2022. But on the other hand, we have some support for energy demand coming from the reopening of the economy. In China sooner and faster than expected , so we have two contradictory factors affecting demand quest’year.
He added that it’s hard to talk about a winner in any war. But in the context of energy, the US has benefited, as has any energy producer, except Russia, but Europe has abandoned Russian fossil fuels and tried to find other suppliers, just to find a good partner in the United States. Thus, American exports are clearly increasing because they are filling the deficit left by Russia.
He explained that the war in Ukraine and the suspension of Russian fossil fuel supplies to Europe have again shed light on energy security and we have seen many countries such as Germany and others in the European Union invest heavily in fossil energy. Above all in terms of building liquefied gas reception capacity, because the war has reaffirmed that energy security should not be taken for granted.
He continued: “We believe that the current situation will accelerate the transformation in the medium to long term. Especially since many governments have started to see renewable energy, not only in terms of environmental benefits, but also as a source of enhancement of their energy safety, because they are produced locally, because there is no need to import the sun or the wind.”
Regarding the future return of Russian gas to the European Union, Daher said Russia would remain a major gas producer in the long term, despite declining production. But if there is a regime change in Russia, and European countries want to support it, we can see the return of Russian gas exports to the European Union, because the infrastructure is there, adding, “But we don’t expect that to happen in short or medium term”.
“We expect more investment in renewable energies, especially from European countries. But we also expect more investment in the production of fossil fuels. This is not only in response to the balance between supply and demand, but also because current prices are high despite the decline from last year’s peaks. And high prices have always been a catalyst for investment in fossil fuels,” Daher said.
He added: “We expect market supplies of oil and gas to remain scarce, at least through 2025. This will support investment in fossil fuel production.”