Russia-Ukraine Conflict and Its Drive of Higher Oil and Gas Prices Should Encourage Chemical Manufacturers to Further Engage with Digital Transformation

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By James Prestwood | 3Q 2022 | IN-6607

 

The Cost of Conflict

NEWS


The current armed conflict in Ukraine is causing significant disruption for markets worldwide. Among these is the chemicals market, which is currently paying a heavy price as oil and gas prices reach unprecedented levels. The chemical manufacturing industry is uniquely exposed to these price increases, with its reliance on oil and gas for both energy and as feedstock.

Russia is the third largest supplier of oil and the second largest supplier of natural gas. Europe is a significant customer in this market and, in 2021, two-fifths of gas and more than a quarter of its oil came from Russia. Germany, Europe’s largest chemical manufacturer, was a particularly heavy user of Russian gas, accounting for 55% of its supply. It was a similar case for the country’s oil supplies, with Russia providing 35% of its usage.

A High Price Is Being Paid by European Chemical Manufacturers

IMPACT


The Russian market is no longer a viable source for oil and gas for European companies due to extensive sanctions. This is forcing chemical manufacturers to f…

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