Next winter will be more challenging, oil CEOs warn

ABU DHABI, United Arab Emirates — Politicians and governments around the world are bracing for potential civil unrest as many countries grapple with mounting energy costs and rising inflation. 

The global economy is facing an onslaught from multiple sides — a war in Europe, and shortages of oil, gas and food, and high inflation, each of which has worsened the next.

Concerns are centered on the coming winter, especially for Europe. Cold weather, combined with an oil and gas shortage stemming from Western sanctions on Russia for its invasion of Ukraine, threatens to upend lives and businesses.

But as much concern as there is ahead of this winter, it’s really the winter of 2023 that people should be worried about, major oil and gas executives have warned.

Energy prices “are approaching unaffordability,” with some people already “spending 50% of their disposable income on energy or higher,” BP CEO Bernard Looney told CNBC’s Hadley Gamble during a panel at the Adipec conference in Abu Dhabi.

But through a combination of high gas storage levels and government spending packages to subsidize people’s bills, Europe may be able to manage the crisis this year.

“I think it has been addressed for this winter,” Looney said. “It’s the next winter I think many of us worry, in Europe, could be even more challenging.” 

The CEO of Italian oil and gas giant Eni expressed the same worry.

For this winter, Europe’s gas storage is around 90% full, according to the International Energy Agency, providing some assurance against a major shortage.

But a large proportion of that is made up of Russian gas imported in previous months, as well as gas from other sources that was easier than usual to buy since major importer China was buying less due to its slower economic activity. 

“We are in good shape for this winter,” Eni chief Claudio Descalzi said during the same panel. “But as we said, the issue is not this winter. It will be the next one, because we are not going to have Russian gas – 98% [less] next year, maybe nothing.”