In an interview with CNBC’s Dan Murphy at the Gastech conference in Dubai, United Arab Emirates earlier this week, Baker Hughes CEO Lorenzo Simonelli commented on whether soaring gas prices were likely to be transitory or if he expected wider implications for consumers, markets and the broader economy.
“I think a lot of people are seeing what’s happening in Europe and it’s bringing to light the important discussion around the energy transition, and the importance that we have around gas as well,” he said.
Benchmark European gas prices have jumped over 250% since the start of the year, Reuters reported this week.
The reasons for the spike are varied. The influential, yet typically conservative, International Energy Agency said on Tuesday that surging European gas prices had “been driven by a combination of a strong recovery in demand and tighter-than-expected supply, as well as several weather-related factors.”
“These include a particularly cold and long heating season in Europe last winter, and lower-than-usual availability of wind energy in recent weeks,” it said.
IEA Executive Director Fatih Birol said given that the reasons behind the price rise were multifaceted, it would be “inaccurate and misleading to lay the responsibility at the door of the clean energy transition.”
Birol’s statement would appear to contrast views expressed by figures such as OPEC Secretary General Mohammed Barkindo.
“I have talked about a new premium that is emerging in the energy markets that I term the transition premium,” Barkindo told CNBC.