The heads of the largest oil and gas firms of the world have warned that people should get themselves ready to pay high prices for energy for years to come. This comment from the top executives of energy companies also apparently added piled on to the pressure on various governments that are already troubled with constantly rising inflation.

Oil and gas prices have skyrocketed in recent months due to a rapid recovery in global economic activity as Covid-19 limitations have been lifted, as well as a decline in investment in new energy suppliers.

While oil and gas firms recorded record profits in 2021, customers, particularly in Europe, have seen high increases in their gasoline, heating, and electricity costs, prompting numerous governments to implement subsidies to alleviate the burden.

“I’ve no good news to deliver, oil prices will remain high”, Patrick Pouyanne, chief executive of France’s TotalEnergies, told RTL Radio.

TotalEnergies will provide a 100-euro ($114.20) voucher to assist some of its lower-income customers in dealing with high energy bills, according to Pouyanne.

After reaching historic highs late last year due to low seasonal supplies, European natural gas prices have more than tripled in the last year.

“What we can expect is volatility in the coming months and years,” BP CEO Bernard Looney told Reuters on Tuesday, following the British company reporting an annual profit that was its highest in the last eight years, triggering calls for the government to levy higher taxes on oil and gas firms to help pay for rising energy costs.

According to Looney, oil markets could see more supply tightening this year, supporting prices that are still above $90 per barrel, their highest since 2014.

On Wednesday, Equinor, Europe’s second-largest pipeline gas supplier after Russia’s Gazprom, reported record quarterly profits.

Its CEO, Anders Opedal, predicted that the European gas market would continue tight, with demand remaining strong this year while below-normal storage needs to be replenished.

“We expect a tight gas market going forward and we expect volatility in power price development,” Opedal told a news conference.

Europe’s leading energy firms intend to transition their operations away from fossil fuels and toward low-carbon energy and renewables and have halted making capital expenditures in finding and drilling out new oil and gas fields in recent years, adding to present supply problems.

Equinor anticipates a 2 per cent rise in total oil and gas output in 2022. In comparison to 2021, BP’s production is predicted to remain flat this year.

(Adapted from MarketScreener.com)

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