Considering the market volatility stemming from the conflict in the Middle East and the closure of the Strait of Hormuz, the European Commission is calling on EU countries to make timely and coordinated preparations to secure the supply of oil and refined petroleum products in the EU.
There is already an obligation on EU countries to maintain oil stocks and to have contingency plans in response to security of supply incidents. EU countries are also contributing – approximately 20% – to the release of over 400 million barrels of emergency oil stocks coordinated by the International Energy Agency (IEA).
In a letter addressed to all EU Energy Ministers, the Commissioner urged EU countries to ensure good coordination, as well as to consider the promotion of voluntary fuel-saving measures, with particular attention to the transport sector, as advised by the IEA in its 10-points plan to cut oil use. Robust monitoring, rapid information-sharing mechanisms and coordination remain essential. Any emergency risks or material changes in oil supply and industry conditions, including commercial stocks, should be tracked and notified to the Commission to ensure continuous assessment and coordinated action.
Commissioner for Energy and Housing Dan Jørgensen comments: ’The European Union’s security of supply remains guaranteed. But we must be ready for a potentially prolonged disruption of international energy trade. This is why we need to act already now. And we need to act together, as a true Union. It is only by working together that we can be stronger and we can protect our citizens and businesses more effectively.’
However, FETSA (the European Federation for Tank Storage Associations) has been consistently lobbying, over a long period of time, for revisions to the oil stock directive to avoid the current crisis situation, through the establishment of adequate product buffers and a more specific refined product stockholding mix. The organisation anticipates the revision of EU stockholding rules to be accelerated.
EU countries should also refrain from taking measures that may increase fuel consumption, limit the free flow of petroleum products or disincentivise EU refinery output. They should also consult with their neighbouring EU countries and the Commission to preserve EU-wide coherence and the functioning of the internal market.
To safeguard the availability of petroleum products on the EU market, any non-emergency refinery maintenance should be deferred. At the same time, increasing the uptake of biofuels could help substitute for fossil petroleum products and alleviate pressure on the market.
