Pierre-François Riolacci, Chief Financial Officer of the French energy services company Engie, announced on Thursday (November 5) at a press conference that rising energy prices, especially in the gas sector, will lead to reduced consumption in Europe this winter. This prediction comes as signs of the impact of this situation on demand are already clearly visible in the third quarter of this year.
Reasons for Rising Energy Prices
Following the war between the United States and the Israeli regime against Iran and disruptions in transit through the Strait of Hormuz, which is considered the main passage for global oil and gas supply, gas and electricity prices in Europe have surged significantly. This has raised serious concerns in the European energy industry. According to reports, gas prices in European markets have reached about $300 per thousand cubic meters, significantly higher than prices in previous years.
Impact on Various Industries
Riolacci noted that chemical companies and other industries in Europe, which have thin profit margins due to high raw material costs, are the first to suffer from rising prices. These industries are facing reduced demand and increased energy costs, and these problems have particularly affected large customers. It is expected that the decline in demand, rising energy costs, and increased regulations will lead to further mergers in the chemical industry.
The European chemical industry, currently facing the most severe recession in decades, is under significant pressure due to rising energy prices and the inability to secure raw materials. Riolacci added, "We experienced this situation in 2022 and 2023, and there is a certain sensitivity to gas demand. We predict that gas consumption will experience a relative decline during the winter."
European industries faced a sharp and sudden increase in energy costs following the outbreak of military conflicts between Russia and Ukraine in 2022. This forced European countries to urgently seek alternatives to Russian gas, which in turn created new challenges for energy supply on the continent.
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