Energy: new shock, old dependencies

Since the summer, there has been a profusion of statistics, diagnoses, forecasts. Whether it is gas, electricity, fuels, energy prices are rising even more than the Covid-19 crisis had brought them down across the world a year earlier. Prices are rising sharply, concerns with: winter and its heating needs have not yet arrived and already part of the population – especially in Europe – must prepare to endure a “Energy shock” of a new type, warns in “one” this autumn, the British weekly The Economist.

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Whoever says “shock” and “energy” necessarily suggests the 1970s. Those of the first oil shocks. “The comparison seems a little too quick to me”, tempers Jean-Eudes Moncomble, secretary general of the French committee of a large association, the World Energy Council. “The context and price dynamics differ”, supports Guy Maisonnier, economist engineer at IFP Energies nouvelles (formerly the French Petroleum Institute).

October 1973, in the midst of the Yom Kippur War: the brutal and even faster rise in prices hit oil in particular. The embargo of the producing countries, united in OPEC, targets the United States, where, moreover, a local decline in production began. In the space of a few weeks, the rates pass the overdrive (times four), to fuel to a new level.

Common questions

October 2021: here, the outbreak first set the gas market on fire (+ 479% in one year on the European reference price) then those of electricity (+ 344% in one year, for the French price overnight), under the effect of the recovery in post-Covid economic activity – and therefore of global demand. As much as the current rise in gas has taken on unparalleled proportions (at the beginning of October, the megawatt hour crossed the 100 euros mark), so too has the price of oil, admittedly quadrupled in a year and a half (around 83 dollars, or 71 euros for a barrel of Brent at the end of October), has already seen higher levels in the past. In particular during the summer of 2008 (beyond 140 dollars), when, again, the state of American stocks seemed fragile.

However different they may be in their triggering, the two shocks raise common questions. “What is really striking today and what can nourish the parallel between the two periods, is the sudden realization of the energy dependence and the vulnerability to imports, to oil in the 1970s, and especially to the gas today ”, underlines Carole Mathieu, responsible for European policies at the energy and climate center of the French Institute of International Relations (IFRI).

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Energy: new shock, old dependencies