Record oil and coal prices fill the coffers of the two energy poles in Asia - Energy

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  • Rising oil and coal prices add to the fortunes of businessmen Adani and Ambani
  • Higher prices led to more investments to take advantage of the market recovery
  • Adani profits jump 30% and Reliance 19% during the first 3 months of 2022
  • Entrepreneur Gautam Adani’s net worth has risen to $106 billion
  • Ambani’s fortune rises to $92.4 billion thanks to prices

Asia’s biggest energy companies continue to reap the benefits of record oil and coal prices, and their owners are getting richer as markets recover.

High global prices following the Russian invasion of Ukraine have boosted the Indian empires of Adani and Ambani, and refined their credentials in the fossil fuel sector, even though energy magnates Gautam Adani and Mukesh Ambani have announced ambitious plans in the green energy sector.

This comes at a time when many developed countries are scrambling to search for alternative sources of fuel and stay away from Russian supplies, in addition to the Group of Seven industrialized countries’ pledge to ban Russian oil imports.

Increased market turmoil has led to a return to burning coal, despite countries pledging to phase out the worst fossil fuel sources to cut emissions.

Oil and coal prices in 2022

It appears that record oil and coal prices have prompted the two companies to increase investments and make plans to make the most of the situation.

Oil and coal prices
Adani Group logo – Image via Reuters

With coal prices at a record high, Adani is expanding a mine in Australia to meet demand, despite the controversy surrounding it.

Ambani’s Reliance Industries buys faltering crude oil shipments cheaply to feed the world’s largest refining complex.

The company was forced to postpone scheduled maintenance operations for the facility, to contribute to the production of more diesel and gasoline, after margins rose to their highest level in 3 years.

Although the two companies have unveiled $142 billion in green investments over the next few decades away from oil and coal — the cornerstones of their empire — they are finding it difficult to weed out those resources, according to Bloomberg.

Global demand for coal is expected to rise to a record level this year and continue to rise until 2024, according to the International Energy Agency.

Managing Director, Head of Investment at TCG Advisory Services in Mumbai, Chakri Locabria, said the war had created headwinds for fossil fuel-based businesses.

The collateral damage, he says, is that fossil fuels will play a vital role in the next 20 years or more, and there is plenty of time to reap the benefits of carbon-based investments.

Adani and Ambani are reaping the rewards

The upward trend in coal prices helped Adani achieve a 30% profit jump in the first 3 months of the year.

As for Reliance, it recorded the highest quarterly profit ever thanks to the prices of record oil products, and the Indian company achieves nearly 60% of the revenues from oil refining and petrochemicals.

Shares of Reliance and Adani rose 19% and 42%, respectively, during the period from February 24, with the start of the Russian invasion of Ukraine, until the end of April, before the collapse of global stocks wiped out some of these gains.

Since the war began, billionaire Gautam Adani has added nearly $25 billion to his fortune, bringing his net worth to $106 billion, according to the Bloomberg Billionaires Index.

Oil and coal prices
The logo of the Reliance Industries Group – photo from Reuters

Meanwhile, billionaire Mukesh Ambani’s fortune rose by about $8 billion to reach $92.4 billion.

Other companies

Besides Adani and Ambani, oil and gas tycoons around the world have benefited from this year’s oil and coal price boom.

The prices helped increase the fortunes of the American businessman, investor in the field of oil and natural gas, Harold Hamm, and the American businessman, CEO of Kinder Morgan, Richard Kinder, and the founder of Freeport LNG, Michael Smith, in addition to the Indonesian coal king, Le Tok Kwong.

According to the Bloomberg Billionaires Index, America’s oil and gas makers have a net worth of $239 billion, a nearly 10% jump since Russia’s invasion of Ukraine.

Record energy prices are fueling this growth amid sanctions to ban Russian energy sources.

Brent crude prices have risen about 32% since the start of the invasion of Ukraine, and the price of a barrel is still more than $100.

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