Ukraine crisis briefing
- ECONOMIC IMPACT -
Latest update: 7 July
Energy prices continue to remain high, putting pressure on consumers. As a result, countries have started taking measures to source energy from alternate sources
The power sector, especially in Europe, is expected to be impacted due to the gas availability and price issues. Utilities will have to look for alternate sources of gas or shift to other sources of generation
Cypriot transport firm Globaltrans Investment could be the company affected the most by the ongoing conflict, with more than 97% of its revenue coming from Russia and Ukraine prior to the war
Mobile Telesystems could be the Russian multinational firm least affected by the war, with more than 97% of its revenue coming from Russian sources prior to the invasion
- SECTOR IMPACT: POWER -
Latest update: 7 July
Despite the price volatility in the wholesale market, Iberdrola SA, the Spanish utility, has announced that it is freezing the price of its current fixed price contracts with its customers. German utility RWE has warned of major consequences of the ongoing war on its business. The company has announced that it will not enter into new supply deals with Russian entities.
BP is offloading its 20% stake in the Russian energy company Rosneft. Shell has announced its exit from its joint ventures with Russian state energy firm Gazprom. The company will also end its involvement in the Nord Stream 2 pipeline project, in which it holds a 10% stake worth $1bn. Some power companies that have decided to stop all commercial activities in Russia include Vestas, Vattenfall, Fortum and Uniper.
The European Commission has presented the REPowerEU Plan to rapidly reduce dependence on Russian fossil fuels and fast forward the green transition. Meanwhile in the UK, the country’s energy price cap is expected to increase by 42% from $2,405 per month to $3,417 per month by October.
The US and the UK have announced new energy sanctions against Russia: the US is banning all imports of Russian oil and gas and the UK announced it would phase out Russian oil imports by the end of 2022. The impact of sanctions is already being felt with skyrocketing prices of oil as well as other commodities.