Ron Bousso, Nerijus Adomaitis

LONDON, (Reuters) – Consumers need to be prepared for high prices over the next few years, top executives of oil and gas companies stated. This would put pressure on countries struggling with rising inflation.

The rapid rebound in global economic activity and the ease of COVID-19 limitations have led to an explosion in oil prices.

Although oil companies had record profits in 2021 and consumers across Europe saw a steep rise in electricity, petrol and heating bills in recent years. Many governments have introduced subsidies to help ease this pressure.

Patrick Pouyanne (chief executive at France’s TotalEnergies) stated that he had no positive news and that oil prices would remain high.

Pouyanne announced that TotalEnergies will give out 100 euro ($114.20 value) coupons to its clients who are less fortunate.

After hitting records late last year due to low seasonal inventories, European prices more than tripled in the past year.

“What can we expect in the future months and years?” BP (NYSE) CEO Bernard Looney stated to Reuters Tuesday, after the British corporation reported its highest ever annual profit in eighteen years. The announcement came as a result of calls by the government for more taxation on oil and gas firms to reduce energy costs.

Looney indicated that the oil market could experience tighter supplies this year. Further support prices of $90 per bar, which are their highest levels since 2014, will also be seen in these markets.

Graphic: Big Oil is shrinking- https://graphics.reuters.com/OIL-MAJORS/lbvgnjlgqpq/chart.png

Tight Market

Equinor, Europe’s second largest pipeline gas supplier following Russia’s Gazprom MCX: posted record quarterly profits Tuesday.

Anders Opedal, its Chief Executive, stated that he expects the European gas market will remain tight. Demand for European gas is expected to continue to be strong in 2018, as lower-than-normal storage needs to replenish.

Opedal said that the market will remain tight and that there would be volatility in price developments.

Europe’s leading energy companies intend to move their business away from fossil fuels towards low-carbon energy. They have also slowed investments in new oil & gas projects over the past years which has contributed to our current shortage of supply.

Equinor projects that its oil and gas production will increase by 2.2% between 2021-2022. BP production will likely remain the same as 2021.

Graphic: Big Oil’s gas production- https://graphics.reuters.com/BIGOIL-GAS/gdpzynjjkvw/chart_eikon.jpg