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illuminem summarizes for you the essential news of the day. Read the full piece on The Guardian or enjoy below
🗞️ Driving the news: Despite a brief period of optimism around retreating energy prices earlier this year, the Israel-Hamas conflict has reignited global concerns over the energy crisis, particularly impacting the UK's economic and energy landscape
• The UK’s recent moves to water down net zero policies does not only impede the nation’s net zero ambitions but also makes little economic sense
🔭 The context: With Sunak redoubling efforts to exploit North Sea oil and gas reserves in an attempt to achieve energy security, the diversification of the UK’s energy sources seems to be a distant hope for the future
• Although the prime minister claims to want billions of pounds invested in renewables, carbon capture and storage, and nuclear, nowhere near enough is being done to move to a low-carbon economy fit for an increasingly volatile world
🌍 Why it matters for the world: Any escalation in the Middle East, a crucial energy-exporting region, could compound the world's economic frailties, including weak growth and persistent inflation
• This is especially concerning given recent reminders of economic vulnerabilities, like the Russian invasion of Ukraine
⏭️ What's next: An extreme risk on the horizon is Iran potentially impeding the Strait of Hormuz's transit, a critical route for 30% of the world's seaborne oil and a fifth of global liquified natural gas
• With Europe's increased dependency on the Middle East for fossil fuel imports, especially from Qatar, any disruption can severely impact energy supply chains
💬 One quote: “If this horrific crisis is not contained then this will add to the supply constraints facing the global economy... It’s not just inflationary, it’s stagflationary.” (Mohamed El-Erian, president of Queens’ College, Cambridge)
📈 One stat: European LNG imports surged by 71% last year in the push to replace Russian gas, including a 74% rise for the UK, which gets nearly a third of its imported supply from Qatar
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