DISRUPTIONS TO THE GLOBAL MARKET

FETSA’s executive director, Ravi Bhatiani, examines the effects of new EU restrictions on the global energy market. In December, the EU’s restrictive measures on crude oil imports came into effect, as well as a price cap on crude oil. In February, restrictive measures on refined products will also be introduced, with the expectation of a further price cap to follow to cover these impacts. The precise consequences of these measures cannot be predicted with any certainty because this is the first time in recent history, in an interconnected world energy market, that such a drastic intervention in market forces has been introduced – with severe legal consequences for anyone who tries to circumvent this policy. At FETSA, we have been working with our members, our supplier partners, the International Energy Agency, strategic stockpiling authorities and the European Commission to look at potential impacts, worst case scenarios and policy options to mitigate any negative consequences. But there are still several large unknown facets, adding a layer of uncertainty into any scenario planning. The most important questions are: Will there be security of supply of both crude oil...