The post-COVID new normal is not shaping up to be a great time for the planet. Prices are soaring, store shelves are bare, and public health restrictions remain prevalent. Well, there is one more item to add to this laundry list of disappointments, dread, and deprivation: an energy crisis. Should Old Man Winter overstay his welcome and leave behind frigid air and piles of snow, the Northern Hemisphere might be in store for a power crunch and higher utility and transportation costs amid soaring commodities for the next several months. Once again, it is another consequence of the government shutting down the globe in response to the coronavirus pandemic. Thanks, bureaucrats and politicians!
Prices Hit Multi-Year Highs
Could West Texas Intermediate (WTI) and Brent crude oil prices advance to $100 a barrel by the end of the year? The bulls have taken over this corner of the international energy market, allowing both contracts to increase to multi-year highs. Although natural gas futures have eased considerably since hitting their peak of $6.46 late last month, they are still trading way above $5. Gasoline and heating oil have extended their gains. Coal, the dirty fossil fuel that the world rejected years ago in favor of renewable sources, is trading at an all-time high.
Russia Bails Out Europe?
The enormous investment in the green economy is not paying dividends for Europe. Some say that the transition to solar and wind power is backfiring. Great Britain endured its least windy summer in several decades, Germany could wait a few years before its new windmills come online, and the European Union is desperate for energy. Suffice it to say, the continent is running low on fuel. One unlikely party could come to the region’s rescue: Russia.
As Liberty Nation recently reported, President Vladimir Putin announced that the state-owned Gazprom could begin delivering gas supplies to the eurozone in the coming weeks. But it may come at a price as the entity has already hiked export prices for natural gas shipments. Still, Putin assured nations that the organization has maintained a stellar track record fulfilling its contracts and that it could feed the region with energy soon.
This has analysts up in arms, claiming that Europe is now “a hostage” to Moscow. Timothy Ash, an emerging markets senior sovereign strategist at Bluebay Asset Management, called the situation “unbelievable” in a research note, adding that “Europe has now left itself hostage to Russia over energy supplies.” Indeed, Putin could be having the last laugh after the geopolitical outrage surrounding the $11 billion Nord Stream 2 pipeline and Europe’s divestment from coal.
OPEC+ Rejects Leaders’ Requests
This past summer, President Joe Biden and his administration urged the Organization of the Petroleum Exporting Countries (OPEC) and its allies, OPEC+, to ramp up output to offset skyrocketing inflation. The cartel recently completed its October policy meeting and, once again, rejected the world’s request. Instead, the group chose to stick with its July agreement to raise production by 400,000 barrels per day (bpd) and wipe out the 5.4 million bpd that was lost during the pandemic. According to a joint statement by ministerial meeting attendees, OPEC is concerned about another COVID-19 wave that would impact demand volumes, potentially sending prices lower and creating a surplus.
Should the global economy continue its recovery and avoid authoritarian tendencies of lockdowns, it is almost certain that global inventories will tighten and possibly slip into a deficit. This is a recipe for sky-high prices at the pump and supermarket and on utility bills.
Food Prices Set to Climb Higher?
The U.N.’s Food and Agriculture Organization (FAO) confirmed that global food prices had hit a ten-year peak. Be it for dairy or meat, the costs to produce and consume food keep growing. One of the reasons for this is the upward pressure on energy costs, resulting in fertilizers impacting farmers’ pockets. The Green Markets North America Fertilizer Price Index soared to a fresh record, topping $996.32 per short ton. From the energy squeeze in Europe and Asia to extreme weather conditions, fertilizer, a byproduct of natural gas, is immensely raising total farm input costs in the United States and Canada.
“It’s this combination of things that’s beginning to get very worrying,” Abdolreza Abbassian, senior economist at the FAO, told Bloomberg. “It’s not just the isolated food-price numbers, but all of them together. I don’t think anyone two or three months ago was expecting the energy prices to get this strong.”
Brace Yourselves, Winter’s Coming
Will the U.S. government come to Americans’ rescue or leave them behind in the cold? The Department of Energy told reporters that it is exploring several tools, whether tapping strategic petroleum reserves or considering a ban on crude exports. But, based on the administration’s record overseas, Americans might be apprehensive about trusting Washington.
Unless global warming rears its ugly head and former Vice President Al Gore stands on his soapbox on CNN and tells the world that he was right all along, it will be a dreadful winter for the Northern Hemisphere. Cheap and plentiful energy allowed North America and Europe to stay warm and escape the subzero temperatures. However, as supply chains grapple with tremendous pressure and producers fail to satisfy global demand, the rising cost and shrinking stockpiles of energy commodities are going to force hundreds of millions of people to endure the agony of Arctic-like environments.
~ Read more from Andrew Moran.
Do you have an opinion about this article? We’d love to hear it! If you send your comments to [email protected], we might even publish your edited remarks in our new feature, LN Readers Speak Out. Remember to include the title of the article along with your name, city, and state.
Please respect our republishing guidelines. Republication permission does not equal site endorsement. Click here.
Liberty Nation Today:
Game Theory and the Arrest of Donald Trump - Who wins and loses in political gamesmanship? - Read Now!
DeSantis Sends Strongest Signal Yet About 2024 - The Florida governor says he can win it all. - Read Now!
Alvin Bragg, His Record, and the Shaky Trump Indictment - Is the Manhattan DA with a record of leniency making an exception for Trump? - Read Now!
Biden DOJ to SCOTUS: Reinstate Domestic Violence Order Gun Ban - AG Merrick Garland wants gun confiscation without criminal conviction. - Read Now!
Liberty Nation On The Go: Listen to Today’s Top News - Conservative News - Hot Off The Press - Audio Playlist - AD FREE - Listen Now!