In the year that has just ended, Italy brilliantly overcame the energy shock caused by the war in Ukraine. The numbers speak for themselves: between October and mid-November, due to the heat, we saved 3 billion cubic meters of gas, 5 percent of all Italian demand. Although most scenarios on strategic gas reserves were pessimistic in September, it is likely that we will be able to arrive in March with levels of around 90 percent. Finally, putting temperatures and consumption together, at the same temperatures we are consuming 15 percent less than in 2021.
However, the situation of the world energy market remains critical. Exactly as happened with the oil shock of the 1970s, even today it has been commodities that have transmitted the tension between the geopolitical crisis and the increase in prices. The proof was the tsunami in energy costs which since the spring has contributed to the increase in global inflation. The prices of Brent and WTI (West Texas Intermediate) have in fact reached peaks above 100 dollars a barrel which have not been seen since the financial crisis of 2008-2009. It could not be otherwise given the Russian importance on the global markets of gas (first exporter) and oil (10 percent of production), and considering that more than 60 percent of Moscow’s oil is traded by sea, which is precisely what is affected by the embargo (see the problems of the Priolo refinery).
Russia has thus lost a major buyer, Europe, but bought others such as China and India to which it sells at a discounted price of about 60 dollars a barrel, while Brent is at 80 dollars. A sharp decline therefore began in the third quarter of this year, positive for future price developments, negative because it was triggered by the anti-Covid restrictions in China and by the sharp slowdown in global demand. In this framework, Enea traces a mandatory path in which energy efficiency and the procurement of gas from other countries are the points of reference. “In the short to medium term, the possibility for Europe to guarantee the security of the gas system – writes the agency in its latest analysis on the Italian energy system – is linked to a multiplicity of factors, but its ability to reduce the request. But the reduction trend recorded in the first nine months of 2022 (-10 percent compared to 2021, minus 7 percent compared to the average of the last 5 years) does not seem sufficient for the ambitious goal that the EU has set for itself of rapid liberation from Russian gas”.
In short, more needs to be done to encourage savings, both on the side of industrial production and on the side of domestic users. Up to now, between the Draghi government and the Meloni government, almost 100 billion euros have been put on the plate for expensive energy, a figure equivalent to 5 percent of Italian GDP. But it won’t be able to continue also because if we continue to finance the reduction in bills without consuming less, gas rationing could be more of an eventuality in the winter of 2023-2024. It is no coincidence that a report by the International Energy Agency (IEA) was recently released, which warns that the process of filling European gas storage sites in 2022 has benefited from key factors, including pipeline flows Russians during the summer and lower LNG imports from China due to the “zero covid” policy. A situation that will not be repeated in 2023, increasing the risk of a gap between supply and demand of up to 30 billion cubic meters during the summer, the key period for the replenishment of gas storage.
Today the price of gas on the TTF (the natural gas stock index) fell from the all-time high of 350 euros per megawatt hour set in August. This is thanks to better forecasts for the cold season, the launch of REPowerEu by the European Commission and the filling of stocks with new agreements with Norway, Algeria and the USA. Furthermore, after many negotiations, the energy ministers have set a ceiling on the price of gas at 180 euros per megawatt hour which will start in February. However, pre-war price levels remain a long way off and with the further reduction of Russian supplies, the scenario for the winter of 2023-2024, in the absence of good news from the Ukrainian front, remains very uncertain.
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