Transcription
Well, for our business news segment today, I'm joined in the studio by Charlotte Lamb. Hi, Charlotte. Um, [snorts] we're returning to one of our top stories today, the US-Israeli war on Iran. Of course, Europe um today waking up to just how long uh this resulting energy crisis could last. What are leaders in Europe doing about that today?
Well, Haxi, the damage is really coming into focus. Today, we did hear from France's finance minister. He says between 30 and 40% of refining capacity in the Gulf has been damaged or destroyed by Iran's retaliatory attacks. And as we know, this is quickly becoming the world's worst energy crisis in half a century. Take a listen.
I have been speaking to the Qatari Minister of Energy specifically and 17% of its gas production capacity is destroyed today following the attacks on these facilities which will take years. We're talking about at least 3 years to restore. Obviously, those that are shut down will take less time, but we're talking about several months to restart. And so we are facing an oil market today in which there is a shortage of 11 million barrels every day. And that's despite the efforts of Saudi Arabia to reopen a pipeline that allows oil exports to the Red Sea.
Several leaders made moves Wednesday. Italian Prime Minister George Maloney has been in Algeria to secure more gas for Italy, which generates more than 40% of it of its electricity from natural gas and has been scrambling to replace lost LG supplies from Qatar. But not everyone is looking to fossil fuels for the answer. In London, Prime Minister Kama told MPs that renewable energy is, in his own words, the only way to bring down energy prices for households and businesses in the long run. Meanwhile, the German government unveiled a major wind power expansion. Rachel Griffiths has the story.
>> The ongoing closure of the Straight of Hallm continues to rattle international energy markets. And across Europe, countries are now scrambling for solutions amid calls the world's facing its worst energy crisis in decades. This as Germany rolls out a new policy making wind energy a priority with an ambitious 2,000 additional wind turbines to be built and Europe's biggest economy aiming to cut greenhouse gas emissions by 65% by 2030. The German government will be presenting an ambitious climate protection program. Reducing CO2 emissions is a political decision, but it comes at a cost. This cost is particularly high during the transition period because investment is required not in expanding production capacity but in replacing it.
>> Across Europe. The widening conflict is forcing countries to plan ahead and look at how to bring down prices. For the UK, there's only one way forward.
>> We fully support all existing oil and gas fields throughout their lifespan. And in November, we made changes to extend to allow neighboring fields to be exploited. But we need to take control of our energy prices. The only way to do that is through renewables.
Research from Ember has shown countries that do not rely as much on gas power are less exposed to electricity price volatility. EU leaders are also considering reviewing taxes, introducing price caps for consumers, and other measures as a quick fix for struggling industries.
Now, amid this growing crisis, the European Central Bank insists it has options and it isn't afraid to use them. President Christine Lagard Wednesday said the bank is well positioned to navigate the energy shock unleashed by this war. At its most recent meeting, the the ECB rather held interest rates steady, but it came with a warning: higher inflation and lower growth ahead. Now, analysts are raising their bets that the bank would move to hike borrowing costs as soon as next month in a bid to head off a surge in consumer prices before it takes hold. Let's hear from the president.
We are facing profound uncertainty about the path that the economy will take. None of us, none of us can resolve the uncertainty about how and when the Ukraine war will end and how the war in Iran will play out. And we will not act before we have sufficient information on the size and persistence of the shock and its propagation. But we will not be paralyzed by hesitation because our commitment to delivering 2% inflation over the medium term is unconditional.
And lastly, a quick look at the markets before we go. The Eurozone bond yields fell on Wednesday, led by a recovery in Italian bonds, which have been among the hardest hit since the start of the US-Israeli war in Iran. But hopes for its possible end has seen the markets in Europe continue to rebound in London, Paris, and Frankfurt all closing out in the plus.