Jeremy Nicholson, Corporate Affairs Officer at Alfa Energy Group, comments on the impact of the Russia-Ukraine crisis on UK/European energy markets:
“Energy users may be horrified at the current cost of their energy supplies, but they should brace themselves for further shocks to come.
“The deterioration of the situation in Ukraine and threat of military action by Russia is adding to the risk of disruption to European gas supplies, putting further pressure on UK/European wholesale gas and power prices. Oil prices are also being affected, with growing expectation oil could shortly reach or exceed $100 a barrel.
“European gas stocks remain very low for the time of year, leaving gas and power generation systems more than usually vulnerable if there is any physical disruption to flows of Russian gas (via Ukraine, or otherwise) into western Europe. With no immediate prospect of the situation in Ukraine being resolved peacefully, and the very real risk of escalation, energy users should expect prices to remain high and volatile in the weeks and months ahead.
“Users should be prepared for energy prices to reach new record levels if the situation deteriorates. It is encouraged to take advice on the best strategy to manage their exposure to these risks. High energy prices cannot be avoided, but there are always options to manage the risks to your business or organisation.”