The European Union is considering measures such as fuel rationing and releasing more oil from strategic reserves amid the risk of a prolonged energy shock resulting from the war in the Middle East, European Energy Commissioner Dan Jorgensen warned on Friday in an interview with the Financial Times.
The EU bloc is evaluating all options, Jorgensen said, stressing that although the EU “not facing for now” with a supply crisis, it is already preparing with contingency plans for the possible structural effects of the conflict launched on February 28 by the United States and Israel against Iran. The commissioner stated that energy prices will remain high for a long time.
After the initial attack, the price of Brent crude rose to nearly $120 and is currently trading around $107, but market volatility remains due to the de facto closure of the Tehran-controlled Strait of Hormuz, through which about 20 percent of global oil shipments pass.
“The rhetoric we resort to and the words we use are now more serious than at the beginning of the crisis”noted Jorgensen, adding: “Our analysis is undoubtedly that this is going to be a protracted situation and countries need to make sure they have what they need.”
The European Commissioner explained that the most drastic measures are being considered only as a precaution.
“We are preparing for worst-case scenarios, although we are not yet at the point where we need to ration critical products like kerosene or diesel. It’s better to be prepared than sorry”Jorgensen appreciated.
The Financial Times notes that the aviation sector is among the most concerned about kerosene supplies, amid regulatory differences between the EU and the United States on fuel specifications. However, the European commissioner assured that Brussels does not intend to change the current regulations, although he does not rule out the possibility of adjustments if the situation worsens.
“We are looking at all possibilities and it is clear that the more serious the situation becomes, the more legislative instruments we will have to consider,” Jorgensen said.
He also did not rule out additional releases from strategic reserves if the energy crisis intensifies and reiterated that the EU does not intend to change its regulatory framework this year to end imports of Russian liquefied natural gas, given that, if necessary, the EU bloc can turn to supplies from the US and other partners.
