August M
Global energy markets can shift fast when conflict erupts near major trade routes.
When fuel lines stall and global prices climb, energy producers often find themselves in prime position. That financial reality is playing out once again across Europe, reports The Guardian.
Profits surge higher
Norway’s state oil company Equinor saw its quarterly profits nearly double to $11.5 billion. The massive jump came as military conflict involving Iran disrupted energy supplies and drove crude prices higher, according to The Guardian.
Equinor is the UK’s largest gas supplier. When fighting broke out, the Norwegian energy giant immediately boosted output to fill a vital void after shipping stalled in the Strait of Hormuz.
Crude prices fluctuated wildly between $75 and over $100 a barrel from April to June. The results easily beat analyst expectations of $11.37 billion and topped last year’s $6.5 billion profit for the same period.
Facing sharp criticism
Equinor chief executive Anders Opedal welcomed the strong results. “Strong production in the second quarter enabled us to capture value from higher prices, contributing to strong cashflow and financial results,” he stated.
He noted that “Reliable energy is important in a volatile world marked by heightened geopolitical tension. Our role is to deliver energy safely and efficiently every day,” as global tensions remain elevated.
However, climate group Uplift slammed the earnings. Executive director Tessa Khan accused Equinor of “raking in billions in profits while millions of people across the UK are struggling with unaffordable energy bills” while pushing the UK to approve the Rosebank oilfield.
She argued that “Rosebank won’t cut our bills, it’s overwhelmingly oil for export, but it will make Equinor and its part-owner, the Norwegian government, even richer,” to keep earnings high.
Market risks mount
Energy prices climbed further after new US military strikes in Iran and Houthi blockade threats against Saudi Arabia.
Susannah Streeter of Wealth Club said “Brent crude has raced upwards again to trade around $93 a barrel, the highest level in six weeks,”.
She warned that “Risks to supplies are mounting again, with the effective blockage of the strait of Hormuz remaining a chokehold as tankers are stranded in and around the waterway, while risks to other crude routes are also intensifying,” as tankers remain stranded near key shipping routes.
Sources: The Guardian
