In a letter sent to member states, the EU Energy Commissioner invites countries to “reduce demand” for hydrocarbons. The continent is moving towards “light” rationing.
What for weeks seemed only like a distant eventuality finally seems to be emerging on the horizon: the EU Commission has urged member states to prepare measures to limit the use of hydrocarbons.
The alarm from the EU Energy Commissioner
In an internal statement sent by the European Energy Commissioner Dan Jorgensensent before yesterday’s summit between the Energy Ministers of the Union, the European Commissioner asked the States to give an account of the current capacity of the internal hydrocarbon markets, asking the governments to propose practical actions to contain the question.
“We depend on global markets for our supply of fossil fuels”, recalls Jorgensen in the letter, “in direct competition with other consumers; Intensifying global competition for available supplies could usher in a greater volatility in European markets”.
Prolonged interruption
Compounding the position of the Old Continent is the great unknown relating to the duration of the hostilities between the United States, Israel and Iran, and, even more importantly, the issue of the reopening of the Strait of Hormuz, the real catalyst of the current crisis.
For this reason, Jorgensen, in the letter sent to the member states, encourages “to prepare promptly in anticipation of a potential prolonged disruption. In addition to the release of emergency supplies, voluntary demand reduction measures represent a further essential response tool”.
Dependence on the Gulf: diesel and jet fuel
While it is true that the percentage of hydrocarbons imported from the Persian Gulf countries is much lower than that of many Asian states, concerns are nevertheless growing about some refined products.
Among them the diesel and the aviation fuelfor which Europe is still highly exposed, importing a lot from Saudi Arabia and Kuwait. The exact numbers vary, but according to the commodity trading company Alkagesta approximately 20% of the diesel consumed by the European Union countries and the United Kingdom comes from the Gulf countries.
“Light” rationing?
In essence, a “light” energy rationing is announced. In fact, the Energy Commissioner suggests “refrain from adopting measures that may increase fuel consumptionlimit the free circulation of petroleum products or discourage the production of EU refineries”.
To this we must then add the increase in competition in grabbing the hydrocarbon supplies not affected by the Hormuz blockade.
This is creating greater volatility in prices and supplies. As reported by Bloomberg, for example, in recent days several LNG and fuel tankers, initially headed for Europe, instead they changed course and headed towards Asiaso as to obtain higher returns.
One of the solutions suggested by Jorgensen to safeguard the availability of petroleum products in Europe is to “encourage postpone any non-urgent refinery maintenanceA palliative that can only be implemented for a relatively short period, working the refineries 24/7.
What is certain is that the much-feared energy “rationing” seems to be approaching for Europe too, of which the measures proposed by Jorgensen seem to be only the foretaste.
