The European Union is preparing for a prolonged energy shock amid the conflict in the Middle East. Brussels is considering „all options,” including rationalizing fuels and using strategic reserves, according to Financial Times.
European Commissioner for Energy, Dan Jørgensen, says the impact of the conflict will not be temporary. „It will be a long-lasting crisis. Energy prices will be higher for a very long period,” Jørgensen stated.
He warns that for some products considered critical, the situation could deteriorate rapidly. "We expect things to get even more difficult in the coming weeks," the commissioner said.
Strait of Hormuz and Gulf attacks have destabilized the market
The partial blockade of the Strait of Hormuz and attacks on energy infrastructure in the Gulf have caused major turbulence in global markets.
Prices have risen significantly, and fears about long-term supply are escalating. Aviation is among the most affected sectors. Serious concerns arise here regarding fuel supply.
"It is better to be prepared than sorry"
Although the EU is not currently facing major supply issues, the Commission is preparing scenarios for "structural and long-lasting" effects.
"It is better to be prepared than sorry," says Jørgensen, emphasizing that rationalizing products such as diesel or kerosene is not necessary at this time but remains an option.
The Commission has not yet amended existing rules, for example, to allow higher fuel imports from the US or increase the proportion of ethanol in fuels.
"We are considering all options. As the situation worsens, we will need to consider legislative tools," the European official said.
Possible new release of strategic reserves
Jørgensen does not rule out a new market intervention by releasing oil from strategic reserves if the situation deteriorates.
EU countries resorted to the most extensive use of strategic oil reserves in history in an attempt to temper price increases.
"We are prepared to act when and if necessary, but the intervention must be done at the right time and in a proportional manner," he explained.
EU not yet giving up Russian liquefied gas
At the same time, Brussels does not intend to amend legislation to halt imports of liquefied natural gas from Russia this year.
The European Commissioner says that the EU can compensate through imports from the US and other partners operating "in a free market."
G.P.