Home Energy Consumers are hurting as 'international power shock' will get underway, says World Energy Council

Consumers are hurting as 'international power shock' will get underway, says World Energy Council

Consumers are hurting as 'international power shock' will get underway, says World Energy Council

The present oil disaster is not like earlier ones — and customers must bear the brunt of it at the same time as they grapple with rising inflation, Angela Wilkinson from the World Energy Council instructed CNBC.

“I think this is a first global energy shock, this isn’t the same as the 1970s crisis, oil shock crisis. This is a … consumer driven crisis and the consumer-driven adjustments that are going to come out of this are going to be very significant,” Wilkinson, secretary common on the group, instructed CNBC’s “Capital Connection” on Thursday.

The spike in oil costs got here after main oil producer Russia invaded Ukraine in late February, triggering main international provide chain disruptions within the power sector as Western nations slapped heavy sanctions on Moscow for the unprovoked battle.

The European Union has additionally proposed a gradual ban on Russian oil, placing extra stress on power costs.

As of Friday morning in Asia, the value of worldwide benchmark Brent crude futures has surged greater than 42% for the reason that begin of the 12 months. It final traded at round $111 per barrel, far greater than ranges beneath $80 seen early this 12 months.

Consumers are actually, actually hurting.

Angela Wilkinson

Secretary General, World Energy Council

The world noticed various oil shocks within the Nineteen Seventies on account of battle within the Middle East.

In 1973, Middle Eastern oil producers halted provide from the U.S. and different Western nations after they assisted Israel in the course of the Arab-Israeli battle that 12 months. The Iran revolution from 1978-1979, which led to the ousting of the Shah of Iran, additionally triggered one other power shock.

“If you look at the price of … refined products in many parts of the world, they’re now unaffordable for many of the bottom half of societies,” Wilkinson warned. “We’re going to have to see some form of massive reallocation of … money coming out of … this crisis. Consumers are really, really hurting.”

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Inflation within the U.Okay. soared to a 40-year excessive in April due partially to spiraling power costs, official information this week confirmed. Similar spikes in costs have additionally been seen within the U.S., the place shopper inflation remained close to 40-year highs in April.

“Just six months ago, we were only talking about climate security. A year ago, we were talking about the Covid crisis and recovery,” Wilkinson mentioned. “Now we’ve got this rolling series of crises in energy – Covid, climate, conflict. And now, we’ve got cost of living crisis being triggered in many countries.”

“The biggest challenge is going to be this new context of affordability and energy justice,” she added. “It’s a big uncertainty and it’s going to require policy innovation but it’s also going to require a new approach to international cooperation.”

— CNBC’s Patti Domm contributed to this report.



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