Energy companies in Europe play significant roles not only in regional but also in international economies. Today, multiple countries have to deal not only with transitioning from natural resources to renewable energy but also with uneasy political situations in this part of the world.
Energy Companies In Europe: Not Only EU
The European Union ties the whole continent up and connects multiple businesses. Thanks to these relationships, each of these companies can develop comprehensively. Nevertheless, due to the industrial history, investors will find two of the most recognizable energy companies in Europe on the London Stock Exchange – Shell and BP.
Obviously it doesn’t mean that the energy sector in Europe relies only on these two British giants. There are multiple companies in Western, Central, and Northern Europe focused on providing sustainable energy.
Connections With The Commodities Market
European energy companies affect several other financial instruments. Traders will not be surprised by the fact that commodities trading fundamentally impacts the performance of energy companies in Europe.
Investors should keep in mind that certain commodities correspond to the energy sector. These include natural gas and oil, which are essential energy resources used from individual households to significant public and private buildings, factories, and sprawls.
Why Does It Matter?
An unstable geopolitical situation causes unrest in almost every European economy. After Russian aggression in Ukraine, Baltic and Scandinavian countries, in addition to Poland, Slovakia, and Czechia, had to deal with a significant energy crisis due to the stoppage of natural resource imports from Siberia. These include natural gas and oil, which are still essential not only to national economies but also to their security.
That’s why European energy companies have an extremely sensitive task. Their mission is not only to generate revenue but also to cooperate with governments to provide energy security. Almost the entire continent is unprepared for the full transition to renewables. As a result, proper management of natural resources, excluding Russian gas, should be a priority for European energy companies.
Energy Companies In Europe: Focus On Renewables
Except for tense relationships with Russia, the EU wants to limit carbon emissions, for example, by shifting energy sources from natural gas to renewable energy. Companies in Europe, such as TotalEnergies, pay attention to various solutions, including solar and wind power.
This approach is appreciated not only by activists trying to slow climate change down. In several countries, renewable energy is less expensive than fossil fuels. It depends on climate policies and tax issues. Nevertheless, solar and wind power stands as one of the most rapidly developing topics for energy companies in Europe.
