Energy markets face ‘one or two years of intense volatility’: CEO

CEO of an Italian power company So Turmoil in energy markets is likely to last for some time, CNBC said on Tuesday.

“Things are very volatile, as they have been all year, I would say,” said Francesco Starese.

“The volatility we’re going to have — it may change a little bit, period, but we’re looking at one or two years of extreme volatility in energy markets,” he said.

Stares’ comments come on the sidelines of Goldman Sachs’ carbonnomics conference in London at a time of uncertainty for the energy sector following Russia’s invasion of Ukraine in February 2022.

There was Russia Largest supplier of both natural gas and petroleum oil to the EU in 2021, but gas exports from Russia to the EU have fallen this year.

“Despite available production and transport capacity, Russia has cut its gas supplies to the EU by 50% from the beginning of 2022.” International Energy Agency said in its gas market report last month.

“In the current environment, it is not possible to completely stop Russian pipeline gas supplies to the EU before the 2022/23 heating season – when the European gas market is most vulnerable.”

Given this drop in Russian imports, major European economies are scrambling to increase supplies in the coming cold months. According to data from industry group Gas Infrastructure Europe, The European Union’s gas reserves are estimated to be 93.9% full.

During his interview with CNBC, Enalin Starace painted a mixed picture when it comes to gas storage.

“I think we’ll get through the winter because of all the storage we’ve been able to fill, and we’ll find that we have to refill the storage for next winter … without Russian gas,” Steve Sedgwick said. .

“Don’t forget we had it at 22 — less and less — but we had it,” Stares said, adding that a large amount of work will be needed in the coming months. “A lot of things have to happen to be safe next winter.”

“Every time we need to save gas, we need to use less of it every time, we need to get rid of the pointless use of gas and leave it to the industry that needs it,” he said.

He said it’s “a big fight that we really have to focus on during the 23rd.”

Iberdrola CEO Ignacio Galan said he broadly agrees with Starace, and he expects volatility in the oil and gas markets to continue over the next few months.

“But I think what we need … is to accelerate building infrastructure in electricity as much as we can,” Callan told CNBC’s “Squawk Box Europe,” referring to renewables and the interconnections. “I think we’re a long way from what’s needed.”

He stressed the importance of reducing reliance on third countries and third parties in favor of increasing self-sufficiency within Europe.

“The only way to do that … is to accelerate our investment in more renewables, more interconnections, more digital grids,” Callan added.