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Thousand for thousand: the energy crisis is spreading to more industries

29 September 2021

Salikhov Marcel R. President, Principal Director on Economic Studies, Head of the Economic Department

Marcel Salikhov, President of the Institute for Energy and Finance, commented to the Izvestia newspaper about prices at the oil and gas markets.

According to Marsel Salikhov, oil and gas markets differ significantly, but there are several channels, through which there is a connection between prices in these markets.

- Firstly, it is a formula binding to oil products in long-term gas supply contracts. Although in the European market such supplies are relatively small at present and account for less than 20% of consumption, for the APR market such a link is generally accepted (about 64% of total demand). Secondly, it is the electricity production from petroleum products. On average, globally only about 3% of electricity is generated from petroleum products. But in some countries of the Middle East (Saudi Arabia, Iran and others) this figure is tens of percent. But in general, this connection is rather indirect, oil and gas have different areas of application.

“For the OPEC + strategy, the decisive factors are the growth of supply in countries that are not part of the agreement (primarily shale production in the United States), changes in reserves in consuming countries, preservation of quarantine restrictions, and so on,” Marcel Salikhov told Izvestia.


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