JP Morgan CEO Jamie Dimon
REUTERS/ Larry Downing
Europe’s energy crisis will worsen and last for years, JPMorgan CEO Jamie Dimon warned.
Russia has slashed its natural gas supplies from the continent this summer, causing electricity prices to skyrocket.
Alternatives to Russian gas and oil are scarce and global demand is high, spelling trouble for energy-strapped Europe.
Europe’s energy crisis is going to get worse and may drag on for years, according to JPMorgan CEO Jamie Dimon.
“It is as serious as you can get,” Dimon said of the energy crisis in an interview with CBS’s Face the Nation on Sunday. “And it can go on for years. But this oil and gas thing – it looks like the Europeans will get through it this winter – but this oil and gas problem is going to go on for years.”
Europe has been threatened with a looming energy crisis since Russia slashed natural gas flows to the continent this summer amid the west’s sanctions over its invasion of Ukraine. The shortage of natural gas has sent European electricity prices skyrocketing over 1000% above normal levels earlier this year, and sparked as desperate scramble for alternative energy sources, including burning coal and garbage for fuel.
Europe is also facing heavy competition on the spot market from Asian natural gas customers, particularly as China ramps up its energy demands as the nation emerges from COVID-19 lockdowns. That’s expected to put more pressure on supply, pushing natural gas prices higher, the International Energy Agency warned.
Oil supplies are also under pressure after the EU imposed its ban on seaborne Russian oil flows, which fully kicked in on December 5. The bloc has also slapped a $60 price cap on Russian crude.
But alternatives on the market dwindling: The US Strategic Petroleum Reserve is ending additional supply releases this month, and OPEC+ announced that it is sticking with a planned 2 million-barrel-a-day production cut.
“If I was in the government or anywhere else, I’d say, ‘I have to prepare for it getting much worse.’ I hope it doesn’t, I would definitely prepare for it getting much worse,” Dimon warned.