Some European Factories, Long Dependent on Cheap Russian Energy, Are Shutting Down
The Wall Street Journal reports Some European Factories, Long Dependent on Cheap Russian Energy, Are Shutting Down
For decades, European industry relied on Russia to supply low-cost oil and natural gas that kept the continent’s factories humming.
Now Europe’s industrial energy costs are soaring in the wake of Russia’s war on Ukraine, hobbling manufacturers’ ability to compete in the global marketplace. Factories are scrambling to find alternatives to Russian energy under threat that Moscow could abruptly turn off the gas spigot, bringing production to a halt.
Europe’s producers of chemicals, fertilizer, steel and other energy-intensive goods have come under pressure over the last eight months as tensions with Russia climbed ahead of the February invasion. Some producers are shutting down in the face of competition from factories in the U.S., the Middle East and other regions where energy costs are much lower than in Europe. Natural-gas prices are now nearly three times higher in Europe than in the U.S.
The Sanction Impact
De-Globalization: New Supply Chains Are Inefficient and Will Drive Up Inflation
On April 4, I wrote De-Globalization: New Supply Chains Are Inefficient and Will Drive Up Inflation
What I called “proposed” then is happening now.
The EU does not want to use Russian oil or natural gas.
So instead, the EU gets oil from Saudi Arabia and has turned to the US for liquid natural gas (LNG).
This economic madness is driving up the price of natural gas in the US as well.
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