Is Europe’s energy crisis just getting started?
Cast your memory back to February 2022….Justin Bieber tests positive for COVID, the Winter Olympics are dominating our screens, but most importantly (and shockingly), Russia invaded Ukraine. Not only did this create global shock, concern, and condemnation towards Russia, but this war was about to create significant ramifications for nearly every country in the world….
Russia is the largest supplier of natural gas to Europe. Natural gas is used by many European households to literally keep the lights on, cook dinner and keep the house toasty warm. Europe relies on Russia for nearly 50% of its natural gas. So when a bunch of western countries stood up in support of Ukraine and sanctioned Russia, what was Russia’s response? Cutting off the natural gas tap (aka a big FU to the world)
And Russia didn’t stop there. It decreased exports of oil (which is used in petrol), coal and many other things such as wheat (used in a number of delicious carbs).
So the world is now in a global energy shortage. Simply - there’s not enough fuel, and therefore not enough electricity, so prices have skyrocketed for both. Some people in Europe are spending up to 50% of their disposable income on energy to ensure they can keep the lights on, literally.
And this is all happening at a time when Europe isn’t even in the depths of winter yet. So will it get worse? Quite possibly…
However, every grey cloud has a silver lining. With such high energy costs, more people are biking or walking to work to save on fuel costs which is great for so many reasons (hello climate change). And on a bigger scale, many Governments globally have realised the importance of ramping up the use of renewables. This will have amazing long-term benefits of decarbonising the planet.
This next part is really going to put a bee in your bonnet… although there is a global energy crisis, oil and gas companies all over the world have delivered record profits this quarter. As prices go up for oil, so does their revenues and their profit. For example ExxonMobil recorded nearly $20 billion in profit, Chevron over $11 billion, Shell $9.5 billion, BP over $8 billion. And, the world's largest oil company, Saudi Aramco, reported making $42 billion this quarter! That is a combined total of $90billion. Wot?
This led to US President Biden lashed out “Oil companies' record profits today are not because they're doing something new or innovative. Their profits are a windfall of war, the windfall from the brutal conflict that's ravaging Ukraine, and hurting tens of millions of people around the globe. At a time of war, any company receiving historic windfall profits like this has a responsibility to act beyond the narrow self-interest of its executives and shareholders.” I agree with Biden.
As a public company, it is your duty and responsibility to act in the best interest of shareholders. As shareholders, we have a duty and responsibility to invest in companies that align with our values and vote with our wallets.
INVESTING IS FOR COOL KIDS
Take control of your future by learning how to be better with your money. Join the thousands of women in The Curve community who are dedicated to building their knowledge and their wealth through investing.