# Hungry for fuel, China looks to the U.S., Europe eyes relief plans Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2021-10-15 Category: NEWS Category URL: https://financedigest.com/category/news Meta Title: China's Energy Crisis Deepens as Cold Weather Hits and Meta Description: Stay updated with China's energy crisis, soaring gas prices, and major companies seeking long-term deals with U.S. suppliers. Energy security is now a top URL: https://financedigest.com/hungry-for-fuel-china-looks-to-the-u-s-europe-eyes-relief-planshtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/2021-10-15t112857z4lynxmpeh9e0fortroptp4power-prices-1736837553824-compressed.jpg) By Chen Aizhu, Jessica Jaganathan and Scott DiSavino (Reuters) – China’s energy crisis deepened on Friday with coal prices hitting a record high as cold weather sweeps in and soaring gas prices prompting major energy companies to seek long-term deals with U.S. suppliers, sources told Reuters. Energy [security has shot to the top of government agendas in Asia and Europe](https://www.financedigest.com/infosecurity-europe-agenda-spotlights-innovation-as-security-leaders-address-cybersecurity-spend-in-the-face-of-economic-headwinds.html "Infosecurity Europe agenda spotlights innovation as security leaders address cybersecurity spend in the face of economic headwinds") as shortages of coal and rocketing gas prices have triggered power outages and choked up factories supplying big name brands such as Apple, just as the global economy reawakens from coronavirus restrictions. To shield consumers from soaring prices as winter approaches, European Union leaders look set to greenlight emergency measures by member states including price caps and subsidies, at a summit [next week](https://www.financedigest.com/china-arrivals-in-uk-next-week-will-not-face-compulsory-covid-tests-independent.html "China arrivals in UK next week will not face compulsory COVID tests -Independent"). China, the [world’s top](https://www.financedigest.com/top-5-restaurants-in-the-world.html "Top 5 restaurants in the world") exporter, has been particularly hard hit and major energy companies such as Sinopec Corp and China National Offshore Oil Company (CNOOC) are in advanced talks about long-term contracts with U.S. exporters of liquefied natural gas (LNG), sources told Reuters. The discussions could lead to [deals worth tens of billions of dollars](https://www.financedigest.com/incentive-fm-secures-new-deal-with-dollar-uk.html "Incentive FM Secures New Deal with Dollar UK") that would ramp up China’s LNG imports from the United States in coming years. In contrast, at the height of Sino-U.S. [trade tensions in 2019, gas trade between the two countries](https://www.financedigest.com/britain-launches-trade-system-for-developing-countries.html "Britain launches trade system for developing countries") briefly came to a standstill. As state-owned enterprises, companies are all under pressure to keep security of supply and the recent [price](https://www.financedigest.com/oil-prices-rise-as-china-eases-covid-curbs-u-s-storm-fuels-supply-worries.html "Oil prices rise as China eases COVID curbs, U.S. storm fuels supply worries") trend has deeply changed the image of long-term supplies in the mind of leadership,” said a Beijing-based trader. In a blow to the fight against global warming, [China and other countries have turned to coal](https://www.financedigest.com/world-coal-power-demand-to-hit-new-high-after-china-india-u-s-surge-iea.html "World coal power demand to hit new high after China, India, U.S. surge – IEA") in the short term. Beijing has also taken a slew of measures to contain [price rises](https://www.financedigest.com/oil-prices-rise-on-u-s-drawdown-chinese-fears-weigh.html "Oil prices rise on U.S. drawdown, Chinese fears weigh"), including raising domestic coal output and cutting supply to power-hungry industries. The most-active January Zhengzhou thermal coal futures contract CZCc1 [hit a record](https://www.financedigest.com/u-s-oil-exports-to-europe-hit-record-in-march-on-steep-discounts.html "U.S. oil exports to Europe hit record in March on steep discounts") high of 1,669.40 yuan ($259.42) per tonne early on Friday, having risen more than 200% year to date. China has assured consumers that energy [supplies will be secured for the winter](https://www.financedigest.com/ceraweek-europe-gas-supplies-to-stay-tight-2-more-winters-equinor-ceo-says.html "CERAWEEK-Europe gas supplies to stay tight 2 more winters, Equinor CEO says") heating season. OIL [KEEPS CLIMBING](https://www.financedigest.com/sas-bridge-financing-keeps-survival-hopes-airborne-shares-climb.html "SAS bridge financing keeps survival hopes airborne, shares climb") President Vladimir Putin told Europe this week that Russia, the region’s largest gas supplier, could provide more gas if asked, to help ease the surge in prices it blames in part on the Europe’s reluctance to [sign up to long term contracts](https://www.financedigest.com/axion-swiss-bank-and-avaloq-sign-long-term-contract-for-bpo-services.html "Axion Swiss Bank and Avaloq sign long-term contract for BPO services"). Some European politicians have said Russia is using a spike in gas prices as leverage to kickstart flows through the Gazprom-backed [Nord Stream](https://www.financedigest.com/denmark-invites-nord-stream-operator-to-help-salvage-unidentified-object.html "Denmark invites Nord Stream operator to help salvage unidentified object") 2 pipeline project, which bypasses Ukraine – an allegation Russia denies. Ukraine’s state-run gas transit operator said on Friday the volume of [Russian gas pumped through Ukraine to Europe](https://www.financedigest.com/exclusive-europe-ready-for-baltics-emergency-switch-off-from-russian-grid.html "Exclusive: Europe ready for Baltics emergency switch-off from Russian grid") has fallen below their current transit contract. This behaviour of [Gazprom deserves the special attention of Europe](https://www.financedigest.com/germanys-uniper-to-restart-coal-fired-power-plant-as-gazprom-halts-supply-to-europe.html "Germany’s Uniper to restart coal-fired power plant as Gazprom halts supply to Europe"), because despite the significant shortage of gas in the EU and maximum prices, Gazprom does not even use the capacity that has already been paid for,” said Sergiy Makogon, the head of the operator, referring to Russia’s state gas exporter. Gazprom did not immediately reply to a request for comment. Oil prices [hit a fresh](https://www.financedigest.com/londons-ftse-100-hits-fresh-record-high-as-telecoms-surge.html "London’s FTSE 100 hits fresh record high as telecoms surge") three-year high on Friday, climbing above $85 a barrel on forecasts of a supply deficit over the next few months as rocketing gas and coal prices stoke a switch to oil products. Poland’s climate minister said on Friday the government will provide an additional 1.5 billion zlotys ($380 million) in subsidies for consumers to [ease the pain](https://www.financedigest.com/factbox-how-governments-are-trying-to-ease-inflation-pain.html "Factbox-How governments are trying to ease inflation pain") as retail prices climb. Germany too confirmed it was slashing a [green energy](https://www.financedigest.com/britains-tax-take-risks-blowing-green-energy-off-target.html "Britain’s tax take risks blowing green energy off target") surcharge on consumers’ bills to help with soaring utility bills. European wholesale natural gas prices are unlikely to return to “normal” levels before 2023, warned [Dutch bank](https://www.financedigest.com/dutch-online-bank-bunq-applies-for-u-s-banking-licence.html "Dutch online bank Bunq applies for U.S. banking licence") ABN Amro. Norway, Europe’s second biggest gas supplier, has been among the winners of the [energy crisis](https://www.financedigest.com/europes-spend-on-energy-crisis-nears-800-billion-euros.html "Europe’s spend on energy crisis nears 800 billion euros"), reporting a record trade surplus up 28% to 53.7 billion Norwegian crowns ($6.37 billion)last month thanks to soaring revenues from selling gas, official data showed. (Reporting by Chen Aizhu, Jessica Jaganathan in Singapore and Scott Disavino in New York, Shivani Singh in Beijing and Beijing newsroom; Writing by Elaine Hardcastle: Editing by Carmel Crimmins) --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---