WEMO24-Compiled Report-Interactive compressed (002) 4154-7882-8116 v.1 - Flipbook - Page 5
Global
Outlook
The continuation of the war in Ukraine, after Russia's unjustified
invasion, combined with Russia's threat to use "special weapons"
and the existence of nuclear reactors in combat zones is a matter
of great concern.
An additional concern is linked to Israel's war against Hamas after
the October 7,2023 massacre perpetrated by Hamas against the
civilian Israeli population. There is a serious risk that it spreads
beyond Israel, with Iran entering in the war. This could inflame
the entire region that is rich in oil and gas. In addition, Houthi
missiles against cargos in the Red Sea make this area unstable
and forces tankers to go through the Cape of Good Hope,
increasing logistics costs (as the tankers’ journey is around 30
days compared to 22 days via the Suez Canal).
In Asia, tensions around Taiwan (which is home to around 70%
of the world's foundries for electronic chip manufacturing1),
with Chinese threats of taking over this territory by force are
also a matter of concern.
The EU packages aimed at developing clean energy and cutting
GHG2 emissions should be hard to undo. But a more climatesceptical EU Parliament could attempt to weaken those laws,
since many are due to be reviewed in the next few years –
including the EU 2035 phase-out of the sale of new combustion
engine cars, which faces criticism.
The European Parliament will also have to negotiate a new,
legally binding target to cut emissions by 2040 with EU countries.
The Labour Party, which came to power in the UK after the July
2024 elections, is committed to double onshore wind, triple
solar power, and quadruple offshore wind by 2030. They pledge
to invest in carbon capture and storage, hydrogen and marine
energy. They aim at extending the lifetime of existing nuclear
plants and completing Hinkley Point C. They recognize that
new nuclear power will play an important role in helping the
UK achieve energy security and clean power.
On the fossil fuels side, the freshly elected government ordered
the immediate ban on new North Sea oil and gas licenses.
In 2024, the result of the American election could have a
significant geopolitical impact and slow down American policy
in the fight against climate change.
After the French elections in July 2024, there will be no majority
in parliament and there is a risk of a standstill on legislation
concerning France's energy transformation.
1 https://www.statista.com/statistics/867223/
worldwide-semiconductor-foundries-by-market-share/
2 GHG: Green House Gases
3 OPEC+ includes the members of OPEC (Organization of the Petroleum Exporting Countries) and
allies led by Russia
4 https://www.reuters.com/business/energy/opec-seen-prolonging-cuts-2024-into-2025two-sources-say-2024-06-02/#:~:text=OPEC%2B%20members%20are%20currently%20
cutting,the%20end%20of%20June%202024.
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Despite these tensions, energy prices have remained moderate.
Between August 2023 and August 2024, Brent oil has traded
between $74/bl and $93/bl, below what many OPEC+ members
need to balance their budgets. This is reflecting the increase
in USA shale oil production in a gloomy economic context and
high interest rates. In June 2024, OPEC+3 4 decided to extend
most of its oil output cuts well into 2025 (cuts of 5.86 million
barrels per day, or about 5.7% of global demand) without impact
on oil price.
WEMO 2024
The year 2023 as well as the first half of 2024 were characterized
by strong geopolitical tensions:
European election results on June 9, 2024, showed centrist
parties keeping their majority, but right-wing and far-right
parties sceptical of the EU's "Green Deal" package gained seats
and green parties experienced heavy losses.
5
Energy markets developments in the
last 12 months
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