If the energy crunch was bad this year, China’s recent loosening of COVIDA global crisis could be triggered by -19 protocols in 2023.

Since the Russian invasion Ukraine in Many countries have had February in many parts of the world. to Mounting is a serious issue energy Bills, caused by abrupt cutoffs in Russian oil and natural gaz shipments to abroad. Countries have taken other measures. to energy Rationalization and stockpiling Reserves ahead of winter energy demand It is the highest. 

They have been mostly successful thus far in They are making great efforts. Europe is at high risk energy crisis due to It elevated reliance on Russian oil and gas Prior to The war was declared “off the hook” This winter, Fatih Birol, chief of the IEA, said Monday that the continent has benefited so far from a mild winter.

But Europe can manage! to Avoid severe consequences energy crisis this winter, it is also because of China’s weak energy demand This year’s slowdown in the economy is due to the country’s zero-COVID policy. China’s commitment to eradicating COVID A safety net in 2022 for European Governments, but as the Country Eyes a Wider Future reopening in 2023This safety net could be lost soon enough. 

China’s total energy demand Forecasted to Increase by the equivalent to 3.3 million barrels per day of oil next year, which is an increase of practically no growth in 2022 according to to S&P Global’s latest energy outlook report This will be Monday. This would be 47% of global total. energy demand Next year, growth

“Demand softness due to lockdowns in 2022 was a key safety valve for oil, gas, and coal markets, while Europe scrambled to replace Russian energy,” DAn Klein, head of Energy Pathways at S&P Global Commodity Insights, said in a statement

“With another year of vaccinations and growing frustrations with lockdowns domestically in China, restrictions will likely ease somewhat in 2023 and imports of fossil fuels can be expected to increase again,” He concluded.

China’s 2022 flatline

After years of continuous growth, 2022 saw China’s electricity consumption fall For the first time in Years as many factories lay idle due to Lockdowns and slower overall economic activity.

Cumulative LNG imports to China fell 20.2% Comparative data for the first nine month of 2022 to According to the same period in last year to Customs data and Europe has taken advantage of all the supply. China was even reselling its excess liquified natural gas to Europe due to Weak demand At home

“Were it not for this demand weakness, prices of all commodities would have undoubtedly been higher, as energy supply not absorbed by China shifted to other areas, highlighted by LNG supply shifting to Europe,” According to S&P’s report.

Europe could be in trouble with winter coming and Europe’s economy awakening from its slumber. to Don’t count on the weak energy demand in China for much longer

China’s resurgent power demand

China, October halted LNG resales abroad to Your own shore up energy Winter supply ahead But that is not the real reversal in China’s energy demand Outlook in 2023 This may have happened earlier in the month, when China’s government started slowly undoing the COVID-19 protocols that have been holding back the country’s economy since the pandemic began.

Some cities are featured in this month’s issue in China has been taking steps to Welding COVID Testing requirements and quarantine rules in Response to National protests against lockdowns and the expectation of stagnating economic growth. Policies now being scrapped Include mass testing in every city in High caseloads may result in hospitalizations and quarantines for patients with mild or non-syndromic symptoms. Widespread lockdowns can also be required to prevent people from moving and restrict business operations beyond a high-risk zone.

Despite mounting new COVID-19 caseloads in China: China could continue to loosen its zero percent policyCOVID Policy in 2023, in Which case? energy The usage is expected to Return to A “growth pathway,” According to S&P, with important ramifications for global energy markets that have benefited from China’s weak demand This is the year.

Meanwhile, Europe’s outlook is positive. 2023 Dimming is becoming more common. While the continent has been able to to Avoid the worst energy Crisis this year, everyone from international organisations including the IMF The OECD to J.P. Morgan Change CEO Jamie Dimon have warned the real battle isn’t this year, it’s for the autumn and winter of 2023When Russian natural gas supplies will be more limited and China’s competition heats up,

In its report, the S&P warned that energy Supply for oil, natural gas, and coal will continue to be limited in 2023To encourage vulnerable nations to prepare.

“European gas and power markets may be even tighter in 2023” amid contracting Russian supply, S&P warned. European buyers were also warned by the report. to Rely on weak LNG recurrences demand from Asia, while reiterating that China’s reopening Plan will continue to Global leadership is your driving force energy demand Next year.

“China’s COVID policy is the most important fundamental factor for global demand in commodities and energy in 2023,” Klein said.

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