FX.co ★ JP Morgan: world urgently needs $1.3 trillion energy investment

The world needs to find an extra $1.3 trillion investment by 2030 to boost all types of energy output and infrastructure to avoid an energy crunch, JP Morgan said in its first annual energy outlook.

Currently, many countries are dealing with problems in the energy sector. Gas and oil prices have recently skyrocketed due to the shortage of supplies and the lack of alternative energy sources. To tackle this issue, the world should increase investments in the energy sector by $1.3 trillion by 2030, JP Morgan noted. "Until scalable, reliable, clean and affordable technologies are available, the world will need to work with all of the current sources of energy - fossil and non-fossil - and their respective drawbacks," JP Morgan analysts stated in the outlook. Notably, the International Energy Agency (IEA) voiced a completely different opinion. It called on world leaders to reduce investments in fossil fuels and make a gradual shift to solar panels and wind farms.

"Not all fuels are made equal, and for the most part (and within this time horizon), different sources of energy are not fully fungible - solar panels cannot replace oil, needed for example in the industrial production of petrochemicals," JP Morgan analysts surmised.

The prospects of the energy crunch are looming on the horizon as many Western countries have refused to buy Russian commodities. This is why EU leaders are now discussing ways to fix the holes in the energy sector. The EU has imposed sanctions on imports of many Russian energy sources. It may also extend the list in the foreseeable future.