The problem will be winter 2023, warn oil companies and traders

The CEOs of the world’s largest oil companies believe that the next winter will be relatively quiet, although prices have risen considerably, pointing to the greatest difficulties for the winter of 2023, that is, for a year from now.

In Abu Dhabi, at a conference that brings together producing countries and oil companies, Russell Hardy, the executive chairman of Vitol, stressed that “we have a difficult winter ahead, but later on, a more difficult winter next year”. “The production available to Europe in the first half of 2023 is considerably less than the production we had available in the first half of 2022,” explained the leader of the world’s largest independent energy trader quoted by CNBC.

For Hardy, “the consequences of energy shortages and therefore of rising prices, all the things that have been discussed here [no debate em Abu Dhabi] about the cost of living, the expectation of future problems, clearly need to be thought about in this context”.

The idea was supported by Bernard Looney, CEO of BP who was present at the same ADIPEC panel discussion, and underlined that energy prices “are approaching the unaffordable”. According to CNBC, Looney also recalled that there are already people who are spending “half of their disposable income on energy”.

“I think this winter was taken care of”, said the manager, adding that “it is the next winter in Europe that can be even more challenging”.

The concern was also highlighted by the executive president of the Italian oil company Eni, stating that he believes that “we are well prepared for this year”. “The question is not this winter. It will be the next one, because we will not have Russian gas – 98% [menos] next year, or maybe nothing”, warned Claudio Descalzi.

For this winter, Europe’s gas storage is at about 90% of total capacity, according to the International Energy Agency, an indicator that gives some assurance of security in the face of shortages.

Even so, a large part of this stored gas is still imported from Russia in the previous months, as well as from other sources where it was easier to buy than at present, not least because China, a large importer, was purchasing smaller quantities due to the braking in its economic activity.

For those responsible for the largest oil companies, cited by the US chain, a harsher winter of 2023 could also trigger more protests and exacerbate social tensions in European countries.