Dati mercati finanziari

The impact of COVID-19 on the global energy system

Impact of COVID-19 pandemic

The macroeconomic environment has gradually improved during 2021 due to the effective vaccination campaigns against the COVID-19 disease, together with measures to contain the spread of the virus, particularly in OECD Countries, allowing for a phased reopening of the economic activities and increasing mobility of people. The expansionary monetary policies adopted by the central banks and the large scale fiscal stimulus launched by the governments supported consumptions and investments. In this context, the demand for hydrocarbons and the prices of commodities, main driver of the Group’s financial results, recorded a significant rebound.

Global energy demand first stabilized and then unexpectedly increased in the last quarter of the year, driven by an acceleration in the pace of the economic recovery, resulting in an increase in the average price of oil for the year by 70% vs. 2020 at about 71$/barrel, while natural gas prices recorded material increases (in the order of several hundreds percentage points) due to a particularly tight market. These trends were the basis of the strong recovery in profitability in the Exploration & Production and Global Gas & LNG Portfolio segments, and to a lesser extent a solid performance of the chemical business line, driven by a recovery in demand for commodities.

The Refining & Marketing business has continued to be weighted down by the effects of the pandemic, due to weak demands for jet fuel that penalized the profitability of traditional refineries by creating an oversupply of gasoil leading to significantly lower products spreads. The profitability was also affected by the higher costs of gasindexed energy and plant utilities and the higher costs for the purchase of emission allowances to comply with the environmental obligations of the European ETS, which more than doubled due to a recovery in industrial activities and as consumption of coal increased signficantly due to its costcompetitiveness against natural gas to fire power generation and to produce steam.

Overall, 2021 saw a significant rebound in consolidated results which closed with a profit of €5.82 billion compared to a loss of €8.64 billion in 2020 and an operating cash flow of €12.86 billion, which increased by approximately €8 billion compared to 2020.

Looking to the future, the main risks for the Group’s financial performance are linked to the possibility of the spread of new vaccine-resistant variants of the virus, as well as the resumption of inflation driven by the spill-over effects through the supply chains of increased raw material costs as the ultimate, unintended effect of accommodative monetary policies and big tax measures adopted to help the economy recover from the fallout of the pandemic.


Source: ENI – ANNUAL REPORT 2021 (page 97)

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(*) This report does not comply with the EU Delegated Regulation 2019/815 (ESEF Regulation)