Some demand for energy in Europe could be 'lost forever' after a terrible year for oil and gas, exec says

• Some of the lost demand for energy in Europe may be gone for good, the CEO of Vitol said.
• Global gas prices soared in 2022 after Russia cut off its gas supply to Europe, disrupting the energy sector.

Turmoil and soaring prices in the energy sector have crimped demand in Europe, and the chief executive of Vitol warned that some of that demand may never return.

"Gas and power had a terrible year for demand [in 2022]," Russel Hardy of Vitol, the world's top independent energy trader, said at a conference in London, per Reuters. "And it continues to be very difficult in Europe...on the industrial side because of the damage over the last few months of high prices."

Hardy, speaking at the Energy Intelligence Forum, added: "We can expect some of that lost demand to stay lost forever."

Following Russia's invasion of Ukraine in February of 2022, Moscow slashed gas supply to Europe. The continent in turn diversified its energy sources and imported liquefied natural gas from other countries, while also taking steps to slash domestic demand.

Russia previously sent 155 billion cubic metres of gas to Europe annually, EU figures show, but that plunged to about 60 billion in 2022, and officials expect that to drop to 20 billion this year.

In Hardy's view, the conflict unfolding between Israel and Hamas could create further energy obstacles.

Last month, Fatih Birol, the head of the International Energy Agency, wrote in a column for the Financial Times that the "the age of seemingly relentless growth" for fossil fuel demand is at the beginning of the end.

"Based only on today's policy settings by governments worldwide — even without any new climate policies — demand for each of the three fossil fuels is set to hit a peak in the coming years," Birol said. "This is the first time that a peak in demand is visible for each fuel this decade — earlier than many people anticipated."