It is likely that the past year represented a turning point in the energy sector. After years of poor performance, shares of energy companies rose in 2022, and while high energy prices played a major role, energy security was a top priority for most countries in the aftermath of the Russian-Ukrainian war. The repercussions of this ongoing conflict will have a significant impact on the sector this year.

In his article published by the American website "The Motley Fool", writer Matthew Dillo said that no one knows exactly how the year 2023 will end, and what the conditions of this sector will lead to this year.


Oil prices are back in 3 digits again

Last year, writer Dilalo predicted that oil prices would remain high, and could exceed $100 a barrel again, and with the continued scarcity of supplies due to the “Covid-19” pandemic and the slow recovery of demand, the ground seems fertile for a possible steady rise in crude oil prices, if any. Unrest in the supply base, and this is exactly what happened after the Russo-Ukrainian war.

The writer indicated that another bull market for oil is expected to come in 2023, and oil supplies will remain restricted because oil companies are still cautious about investing in expanding their production, and in addition to that there is a lot of uncertainty about Russia’s supplies, it has recently banned oil exports to Countries that capped their oil prices in response to their ongoing war with Ukraine.

In terms of demand, it seems that China is ready to fully reopen its economy, and this could release pent-up demand from that country, and while the global economic recession could affect demand, the return of the Chinese economy to normal may help raise consumption.

The writer notes that all these indicators point to a rise in the price of oil in 2023, as many Wall Street analysts expect the price of crude oil to reach $100 by the middle of the year.

3 possible scenarios:

Carbon sequestration is the most important investment trend in 2023

The writer says that while climate change is still a major concern for global governments, energy security has become a similar priority, and this is what prompted countries to search for solutions to both problems.

One solution that has emerged as a potential game-changer for energy is carbon capture and storage technology that will help capture carbon dioxide and sequester it underground, and as a result reduce fossil fuel emissions.

Oil companies believe that carbon capture and storage represents a business opportunity that would earn them millions of dollars, which is why giant oil companies such as Chevron, Exxon and Occidental Petroleum have increased their investments in This technique.

The writer believes that the year 2023 will mark a critical inflection point for carbon capture and storage technology, and we will see more countries and companies joining the idea that carbon dioxide capture and storage can become an important part of solving problems caused by climate change.

The next wave of LNG projects

The writer explains that the other fuel that can be a solution to the world's energy security and emissions problems is liquefied natural gas, which is available in certain parts of the world and has a lower emissions rate than oil and coal.

Because of that, it could become the key to solving Europe's energy crisis now that Russia has cut its gas supplies to the continent.

According to ExxonMobil, due to the fuel shortage, the LNG export facilities will make positive final investment decisions in the next year, and there are many facilities in the pipeline, including projects supported by Energy Transfer and Davon. Davonne Energy, and ConocoPhillips.


 Oil prices will rise again in 2023

The Russian-Ukrainian war has radically changed the long-term outlook for the oil market, and along with many other factors, this war is likely to lead to higher oil prices in 2023, and as a result, energy security will remain a priority, leading to a new wave of gas investments. LNG and CCS will also emerge as a viable long-term solution that will help enhance the sustainability of the fossil fuel sector.

The writer concludes his report by saying that, in light of all these data, it is expected that the stocks of oil companies will perform well again in 2023, especially those working to develop carbon capture, storage and liquefied natural gas projects.