World may face global crisis due to energy prices

The rise in energy prices and problems with the supply of many goods may lead to a global crisis this winter, Bloomberg journalist Michael Winfrey wrote, Report informs referring to Bloomberg.

With the world facing spiraling energy prices and a pandemic-induced supply-chain crunch for everything from grains to computer chips, it’s a maxim occupying the minds of many leaders.

With news from the UK of empty supermarket shelves and gas station pumps and government warnings to avoid panic buying during a driver shortage blamed at least in part on Brexit, challenges are looming for the rest of the planet too.

For starters, temperatures this winter in the northern hemisphere will ripple through every conceivable market. Meteorologists are divided on how it will play out, but the most frigid scenario - the potential disruption of the polar vortex - could turn the world-wide energy squeeze into a full-blown crisis.

The fight for resources has already started: China ordered its state-owned companies yesterday to secure energy supplies at all costs, telling coal producers to run at full capacity even if they exceed annual quota limits. The news sent natural gas and power prices to record highs in Europe, where lower flows from the continent’s main supplier, Russia, are raising alarms.

In the Netherlands, skyrocketing power prices are forcing Europe’s biggest network of greenhouses to go dark or scale back, threatening produce supplies.

And France, where President Emmanuel Macron is running for re-election next year, said it will block new increases in regulated gas tariffs and cut taxes on power to temper discontent.

Extreme weather is also tightening the world’s supply of wheat, shrinking stockpiles and dimming prospects for output from North America to Russia, even as signs increase that the world will need more.

After one bad winter under the virus, the one to come may provide little respite for governments already straining under the economic costs of fighting the pandemic.