The sectors most affected by soaring energy prices
The effects of soaring energy prices are being felt by almost all companies. Aviation, shipping and chemical firms are directly impacted by higher energy prices. The food industry, travel agencies and hospitality are impacted by second-round effects. Corporate decision-makers have some tools available to mitigate the impact.
High energy prices are the new normal for business leaders
European energy markets became very tight and volatile in the autumn of 2021 due to concerns about limited gas reserves for the winter months. Luckily, Europe was saved by a relatively mild winter, but by the time concerns in the market diminished, Russia invaded Ukraine. Energy markets have remained very volatile and tight with energy becoming part of the conflict. Europe has implemented a ban on coal and oil. In turn, Russia has reduced gas flows to the EU in several small steps that now amount to around 23 billion cubic metres (bcm), which is about 15% of the total Russian gas supply to the EU.
The implication for corporate decision-makers is that energy prices are likely to remain high for much longer. Gas prices are expected to stay above €70/MWh until 2023 and oil prices well above $80 until 2024. We first assessed the impact of high energy prices on sectors in our article The ripple effects of soaring energy prices. This article provides an update.
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