Russia’s oil power “will never return”, according to the IEA. “The breakup happened at a speed that few imagined possible”

Even as Russian missiles pound Ukraine, destroying around a third of Ukraine’s electricity grid and leaving its towns and villages in ruins, President Vladimir Putin has already lost the war on one crucial point: Russia’s enormous influence over global energy supply, which it has accumulated over the years. decades – shrinks considerably, probably forever.

This is the assessment of the International Energy Agency, the Paris-based agency that includes the world’s largest producing and consuming countries, in its annual World Energy Outlook report, published on Thursday.

“The breakdown has happened at a speed few imagined possible,” the organization says in its 524-page report, which presents three different scenarios for the coming decades, depending on whether major countries meet their commitments or not. green energy. “Russian Fossil Fuel Exports [will] never go back in any of the scenarios… to the levels seen in 2021,” he says.

Instead, Russian oil and gas revenues will more than halve, from $75 billion last year to less than $30 billion in 2030. And as Europe turns rapidly to supplies of from the United States and the Middle East, Russia’s global market will decline further. It’s a dizzying change for Putin, whose country until last year supplied no less than 20% of the world’s fossil fuels.

The crisis has caused deep concern among millions of people, whose energy bills have skyrocketed over the past year. Even so, the oil supermajors won a $2 trillion windfall, according to the IEA report. The big five oil companies – ExxonMobil, TotalEnergies, BP, Shell and Chevron – will likely post third-quarter profit of $50.7 billion, down slightly from their all-time high a quarter earlier, according to Bloomberg estimates this week.

“No Looking Back”

The implications of the energy crisis are profound, says the IEA, whose flagship publication has been arid reading for many years; the organization was founded in 1974, in the midst of the last world oil crisis, to represent major consumers and producers.

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This crisis, he says, is a dramatic turning point for the world, triggered by the war in Ukraine, which erupted just as the global economy was recovering from the COVID-19 pandemic. The double whammy has produced “a crisis of unprecedented depth and complexity”, says the IEA, which represents major energy consumers and producers. “A profound reorientation of international energy trade is underway,” the report said. “Many of the contours of this new world are not yet fully defined, but there is no turning back.”

Indeed, for the first time, the IEA predicts that global fossil fuel consumption will peak, or level off, not because of abstract future policies, but because of changes already underway. As electric vehicle sales increase, global oil demand will peak in the mid-2020s, a decade earlier than the organization predicts.

In fact, the IEA believes that this year’s seismic events could push countries to accelerate their energy transition, as electric vehicles and solar and wind power are increasingly seen as far less vulnerable to climate-related disruptions. war and sanctions. What is unclear is whether a global recession could dampen government investment in renewable energy. “A key question for policymakers is whether the crisis will be a setback for clean energy transitions or catalyze faster action,” the IEA says.

Hours before the organization released its report, the Global Wind Energy Council, which represents companies from 80 countries, said the IEA’s report showed how global oil and gas markets – concentrated in a handful countries – had been “used and abused” over the past year. “In contrast,” said Sepi Golzari-Munro, the organization’s energy transition director, “renewables offer nations around the world the opportunity to benefit from local, secure and sustainable energy on their own terms.” .

This story was originally featured on Fortune.com

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