New Hormuz blockade changes global energy situation says Descalzi

The fresh Iranian blockade of the

Strait of Hornuz changes the global energy situation, Eni CEO

Claudio Descalzi told the Italian parliament Thursday.

"We are in a situation, from an energy standpoint, that prices

have obviously not yet certified as a major problem because

approximately 400 million barrels of reserves for OECD countries

have been used and released onto the market, which has allowed

prices to remain in a range between $90 and $100," Descalzi

told a hearing of the Lower House Productive Activities

Committee.

"With the signing of the agreement (with Iran, ed.), there was a

fall to $68, now we're back to $85," Descalzi said, "obviously

because there was no positive follow-up to that agreement. "Now,

since the 11th, not a single ship has passed through the Strait,

so there's a new blockade.

"This changes the order of things, it changes it for Europe, and

in this case, it changes it more globally."

Descalzi told the panel that Middle Eastern energy contributions

will not return to the way they were before, saying that when

they do resume, it will be on a completely different basis.

In terms of energy supplies, "the past configuration based on

Russia and the Middle East has completely eroded," with

production contributions that "are unlikely to return to

previous levels for a long time," Descalzi said.

"Even when these contributions from the Gulf arrive, when, I

hope soon, everything is over, the risk attributed to this area

will be completely different," with higher interest rates,

insurance premiums, and impacts on investments.

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