Review of previous global energy crises
The sharp rise in natural gas prices has brought about the European energy crisis. Historically, the global energy crisis has occurred four times before, namely:
①An oil crisis occurred in 1973-1974, and the fourth Middle East war broke out in 1973. This oil crisis directly led to the severe post-war economic crisis in the West in 1974 and 1975;
②The second oil crisis occurred in 1979-1980. The U.S. has launched an oil blockade against Iran, disrupting Iranian oil exports, which account for one-tenth of global oil production. The second oil crisis once again led to economic recession in various countries.
③ The direct trigger of the three oil crises was the Gulf War in 1990.
④ The four oil crises mainly occurred in 2007-2008. The depreciation of the dollar, the rise of emerging economies, the substantial increase in demand, and the instability in the Middle East caused the price of crude oil to rise to $147 per barrel. It eventually led to the subprime mortgage crisis in the United States that swept the world.
Summarizing the common points of the past energy crises, wars or regional situations are often the trigger. At the same time, demand growth and monetary policy cannot be ignored.
The causes of the European energy crisis from 2021 to the present
Factors affecting the energy crisis: the gradual decoupling of natural gas pricing and oil
This round of energy crisis originated from the sharp rise in natural gas prices. Why is different from the previous rounds of crude oil energy crises, natural gas has become the main carrier of the crisis this time. The main reason is that the pricing mechanism of natural gas and the structure of supply and demand have changed.
The pricing mechanism of natural gas has gone through the evolution process from fixed price to oil price link, and gradually emerged from gas-to-gas competition. Linking with oil price means that the trading price of LNG is linked to the price index of crude oil, refined oil, fuel oil and other oil products. Gas-to-gas competition refers to spot prices or mature futures prices (NYMEX) and other spot price indices (JKM) linked to trading hubs (such as Henry Hub in the United States) and virtual trading hubs (such as NBP in the United Kingdom, TTF in the Netherlands).