The energy sector had a difficult pandemic and Government attempts to pursue net zero carbon policies added further challenges. But with the UK oil giants announcing record profits, it is clear that their setbacks were short-lived.

The West Texas oil price is close to $90, up about 50% from lows last year. European Natural Gas – a transition fuel to cleaner energy – saw prices almost triple in 2021, before dropping back. Despite tensions in Ukraine, gas prices are below the peaks of last year, but they remain volatile.

As economies reopen and travel bans lift, demand for fossil fuels is climbing. Ironically, climate change has hampered the yield from some green technologies – such as wind. The demand-supply imbalance may be only temporary, but fossil fuels are still the Plan B for most major economies and traditional energy companies know that they hold the balance of power.

Figure 1 shows regional credit trends for Oil & Gas [please continue below to access full report].

Figure 1: Oil & Gas Regional Trends, past 24 months

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