Energy prices in Europe jumped to record levels early on Tuesday, amid expectations of further hikes due to worsening supply shortages with the onset of winter.
According to what was monitored by the “Bloomberg” news agency, stocks are declining in all sources, from natural gas to coal, and even the water that Norway uses to produce electricity, in the absence of indications that the situation will improve soon, especially since this coincides with the recovery of demand after the pandemic.
Many UK energy suppliers have stopped, amid warnings that unprecedented prices could disrupt the shift away from fossil fuels.
Netherlands natural gas futures rose 12%, while carbon futures jumped 2.2%.
Electricity in Germany for the next year and gas in Britain also rose to a new level.
Meanwhile, the German company "BASF" - the largest chemical producer in Europe - reduced its production of ammonia due to the high prices of natural gas, which is an essential raw material for the production of ammonia.
BASF said it had reduced its ammonia production at its two plants in Antwerp, Belgium, and Ludwigshafen, Germany.
Bloomberg Agency reported that BASF's decision shows the extent to which major industrial companies in Germany have been affected by the unprecedented rise in energy prices, with European gas prices rising three times this year.
Bloomberg added that the rise in energy prices comes at a time when supply chains are experiencing disruptions that increase the suffering of European economies in their attempts to get out of the repercussions of the emerging Corona virus pandemic.
The dilemma of the transition to renewable energy
A week ago, OPEC Secretary-General Muhammad Barkindo said that natural gas prices are rising due to attempts to switch to renewable sources of energy.
"I talked about a new premium appearing in the energy markets, which I call the transition premium," Barkindo added.
Gas prices in Europe have jumped as much as 280 percent since the beginning of this year, and threaten to increase fuel bills in the winter, hurt consumption and exacerbate rising inflation in the short term.
Environmental groups and governments around the world are calling for a move away from fossil fuels and cleaner forms of energy to cut carbon emissions.
A report published by "oil price" website warned that the energy crisis that began in Europe this month is now on its way to reach the United States and possibly the world.