LPG prices and demand have been disrupted globally on account of the Russia-Ukraine crisis
- 08-Apr-2022 8:41 AM
- Journalist: Peter Schmidt
When Russia invaded Ukraine on 24th Feb and created extreme price trend variation of LPG across the globe, Russia was also being accused of intentional disruption of gas supply for months to leverage its role as the highest gas exporter to Europe during an escalating dispute with Ukraine. The aftershock of the high price of LPG was different in various regions. Europe suffered the most due to its high dependency on Russian oil and its increased reliance on LPG for Energy. Meanwhile, the cost of living for the African populous was also highly impacted as their cooking gas price rose by 50%.
As the whole world is desperate to find alternate oil sources, Europe is eyeing Africa to meet its oil needs. However, Africa cannot produce 380 million cubic meters of LPG on average per day, which is the amount Europe is receiving from Russia. In 2019, Nigeria exported over two million barrels of natural gas to the international market. Still, they are nowhere near to the production capacity of the OPEC quota. Not all African countries have sided with Ukraine in the ongoing Russia-Ukraine war. A few African leaders even showed no interest in meeting with European delegates to discuss the improved LPG exports, which aggravated the LPG supply crunch in Europe. LPG prices in Europe are on an uptrend due to their ban on Russian oil and gas, and Europe’s hopes of alternate exporters (OPEC countries and Africa) to meet its requirement are bleak.
According to ChemAnalyst, the prices of LPG in Europe are likely to remain high until they can find alternate oil exporters. While few countries like Germany had a deal with OPEC countries to increase their exports, the rest of Europe is still searching for alternate exporters. The countries that were able to make a deal with alternate exporting countries have started to see a decrease in the LPG prices, while the other countries are likely to see a rise in the LPG prices.