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Global oil crisis and inflation hurt consumers: World Energy Council


The current oil crisis is not like the previous ones – and consumers will bear the brunt of it even as they grapple with rising inflation, Angela Wilkinson from the World Energy Council told CNBC.

“I think this is a first-of-its-kind global energy shock, it’s not like the 1970 crisis, the oil shock crisis. This is a crisis … driven by consumers and regulators. consumer-driven will happen Wilkinson, the organization’s secretary general, told CNBC’s “Capital Connection” on Thursday.

The spike in oil prices comes after major oil producer Russia invaded Ukraine in late February, causing major global supply chain disruptions in the energy sector as Western countries reimposed sanctions. heavy on Moscow because of the gratuitous war.

The European Union has also proposed a gradual ban on Russian oilput more pressure on energy prices.

As of Friday morning in Asia, international benchmark prices Brent Crude Oil Futures has increased by more than 42% since the beginning of the year. It last traded at around $111 a barrel, much higher than the lows below $80 earlier this year.

Consumers are really, really hurt.

Angela Wilkinson

Secretary General, World Energy Council

The world has seen a number of oil shocks in the 1970s due to conflict in the Middle East.

In 1973, oil producers in the Middle East stopped supplying from the US and other Western countries after they aided Israel in the war. Arab-Israeli War that year. The Iranian revolution of 1978-1979, which led to the overthrow of the Shah of Iran, also caused another energy shock.

“If you look at the prices of…refined products in many parts of the world, they’re currently unaffordable for many in the bottom half of society,” warns Wilkinson. “We’re going to have to see some form of massive reallocation … money out of … this crisis. Consumers are really, really hurt.”

Read more about energy from CNBC Pro

UK inflation rose to 40-year high in April This week’s official data suggests it’s partly due to a spiraling increase in energy prices. Similar price spikes have also been witnessed in the US, where Consumer inflation remains near 40-year high in April.

“Just six months ago we were just talking about climate security. A year ago we were talking about the Covid crisis and recovery,” Wilkinson said. “Now we have a series of energy crises – Covid, climate, conflict. And now, we have a cost of living crisis that is being triggered in many countries.”

“The biggest challenge will be the new landscape of energy affordability and equity,” she added. “It is a great uncertainty and it will require policy innovation but it will also require a new approach to international cooperation.”

– CNBC’s Patti Domm contributed to this report.



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