IEEJ：July ©IEEJ 2023
Special Bulletin
A Japanese Perspective on the International Energy Landscape (645)

July 14, 2023

2022 World Energy Situation Indicated by Renamed Statistical Review ofWorld Energy (2)Ken Koyama, PhD
Chief Economist, Senior Managing Director
The Institute of Energy Economics, Japan
In “A Japanese Perspective on the International Energy Landscape (643),” based on the"Energy Institute (EI) Statistical Review of World Energy 2023" released late last month, I summarized
the main points of the international energy situation in 2022, focusing on a viewpoint of energy
consumption. In this report, I would like to briefly review energy consumption trends, outline
international energy price trends in 2022 and summarize the important points on the supply side
(production and international trade) in the order of oil, natural gas and LNG, and coal.
In the international energy market in 2022, global primary energy consumption increased by
1.1% from the previous year, a slower rise than the average for the past 10 years. However,consumption trends significantly differed by region and by energy source. By region, North America,
Latin America and the Middle East saw robust increases in consumption, while Europe and Russia
posted substantial consumption declines due to the Ukraine crisis. By energy source, oil showed asolid consumption increase, while natural gas posted a sharp consumption fall due to the Ukraine crisis.
Although global coal consumption was almost flat, China, India, the European Union and some others
showed signs of a comeback to coal. Among non-fossil energy sources, renewable energy showeddouble-digit consumption growth, but nuclear energy consumption fell sharply due to declines incountries such as France, Germany and Ukraine. These energy consumption trends indicated various
impacts of the Ukraine crisis.
International energy market prices were also exposed to turbulence because of the Ukraine
crisis. According to the EI Statistics, the average 2022 spot price of benchmark crude oil Brent
increased by $30.41 per barrel or 42% from the previous year to $101.32/bbl. The price shot up about
2.5 times from 2020, when prices were sluggish due to the COVID-19 disaster. The average priceexceeded $100/bbl for the first time in nine years since 2013. The Russian oil embargo increased
supply insecurity in the market, leading oil prices to rise significantly, mainly in the first half of 2022.
Due to the Ukraine crisis, natural gas and LNG posted even more dramatic price hikes thanoil. In Europe, which faced a significant decline in pipeline gas supply from Russia as described below,
the 2022 average Dutch TTF (Title Transfer Facility) futures price, a European natural gas benchmark,skyrocketed by $21.46 per million British thermal units or 134% to a record high of $37.48/MMBtu.
In terms of oil equivalent, the average price exceeded $210/bbl, indicating an extraordinarily highlevel. In tandem with European gas price spikes, the Japan/Korea Marker LNG spot price for Asia alsorose to a record $33.98/MMBtu. In the United States, where natural gas price hikes were slower, thebenchmark Henry Hub price rose by 68% to $6.45/MMBtu, the highest in 14 years since 2008.
Coal also experienced unprecedentedly high prices in 2022. In particular, a representative
coal price in Northwestern Europe recorded a significant increase of $171.93 per ton or 141% to a1

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record $293.63/ton. Thus, the international energy market in 2022 was hit by unprecedented pricehikes, mainly for natural gas/LNG and coal.
On the supply side, global oil production in 2022 totaled 93.85 million barrels per day,showing a solid increase of 4.2% from the previous year. In line with an increase in global demand,oil production expanded globally. In the United States, the largest oil-producing country in the world,
production increased by 6.5% from the previous year to 17.77 million bpd. Saudi Arabia, the secondlargest, boosted oil production by 10.8% to 12.14 million bpd, while Russia, the third largest, posted
a slight increase of 1.8% in oil production to 11.2 million bpd. Oil production in the Middle East, thelargest oil-producing region, grew by as much as 9.2%, further increasing the importance of the Middle
East in the oil market amid the Ukraine crisis. It was also interesting that the Organization of thePetroleum Exporting Countries scored a 7.2% oil production increase and raised its share of global oilproduction to 36.3%. The OPEC share rose for the second straight year after declining gradually until2020.
Oil exports showed similar trends. Exports increased by 10.1% to 8.76 million bpd in theUnited States, by 14.1% to 8.87 million bpd in Saudi Arabia and by 8.7% to 15.39 million bpd in theMiddle East excluding Saudi Arabia. Exports in Russia posted a small rise of 1.7% to 7.95 million
bpd. In oil exports, the importance of Saudi Arabia, the Middle East and OPEC was highlighted in2022. In Russia subjected to a Western oil embargo, oil production and exports increased in 2022,
instead of decreasing, indicating that international oil flows changed as a decrease in Russian exports
to Western countries was more than offset by an increase in those to other countries.
In 2022, global natural gas production totaled 4,043.8 billion cubic meters, showing a slightdecrease of 0.2% from the previous year. It had posted a solid increase of 2.0% on average over thepast 10 years before turning down in 2022. By region, the United States, the world's largest natural
gas producer, boosted production by 3.6% to 978.6 billion cubic meters, while Russia, the second
largest, reduced production by a steep 11.9% to 618.4 billion cubic meters. The former Soviet Union
including Russia also cut production by 9.6% to 805.9 billion cubic meters, indicating the impact of
the Ukraine crisis.
The significant expansion in U.S. natural gas production is closely related to a substantial
increase in U.S. LNG exports in response to soaring gas prices. U.S. LNG exports in 2022 grew by asmuch as 10.2% from the previous year to 104.2 billion cubic meters. Europe absorbed this increase,expanding its LNG imports by 58.4% to 170.2 billion cubic meters. Europe is the largest LNGimporting market, outdoing Japanese and Chinese markets. In the face of high LNG prices, LNG
imports decreased by 15.2% in China, 15.4% in India and 2.0% in Asian members of the Organization
for Economic Cooperation and Development. Coupled with the sharp increase in LNG imports inEurope, the decline in those to Asia brought about major changes in international LNG flows,including expanding U.S. exports’ shift from Asia to Europe. Highlighted changes in pipeline gas trade
included a Russian export fall and a European import decrease. In 2022, Russia's pipeline gas exports
plunged by 37.7% from the previous year to 125.3 billion cubic meters. The sharp decline in Russian
pipeline gas exports, which accounted for about 20% of the world's gas trade (pipeline gas and LNGtrade) in 2021, had a huge impact on the global gas market. This was the direct cause of theabovementioned surge in European gas prices. The decline in Russian pipeline gas exports directly ledto the fall in European pipeline gas imports. European pipeline gas imports nosedived by 80.9 billion
cubic meters or 34.9% to 150.8 billion cubic meters. The decline was close to the decrease in Russia’s
pipeline exports of 76.0 billion cubic meters.
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In 2022, global coal production totaled 8.8 billion tons, scoring a significant increase of
7.9% from the previous year. This is a significant change compared to the average annual increase of
0.8% over the past 10 years. India, the largest coal producer in the world, and China, the second largest,
posted double-digit growth in coal production, indicating their emphasis on and comeback to coal. Ininternational trade, there were notable changes such as a decline in overall coal exports, including a
12.1% decline in Russian coal exports, and a 10.0% increase in European imports. In addition, China
cut coal imports by 12.6% while increasing domestic production. The Ukraine crisis thus had various
effects on international coal trade in 2022.
Contact: report@tky.ieej.or.jp
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