BRUSSELS: European Union officials discussed diversifying oil stocks and creating a buffer for diesel and gasoil during an emergency meeting of the bloc’s oil coordination group, one told Reuters.
Friday’s meeting was called by the EU commissioner for energy Kadri Simson to assess potential supply risks in case the Israel-Hamas conflict triggers a broader regional one.
“Oil is important. Not enough diesel could lead to strikes. We don’t want our trucks queuing for diesel,” the official said, adding: “Is this a 1973 moment or not?”
This month’s conflict in Gaza has revived memories of the 1973 oil shock during the Yom Kippur War, when the Organization for Petroleum Exporting Countries (OPEC) slapped an oil embargo on western supporters of Israel, triggering fuel shortages.
The meeting of the EU’s oil coordination group concluded that the risks are much lower than 50 years ago as Europe only relies on oil for about 30% of its energy mix, although Saudi Arabia is one of its top three suppliers, the official said. “A possible crisis would have an immediate impact on price but it’s less of a security of supply risk, though the market is very tight because of OPEC+ cuts, tightness should ease in 2024,” the official added.
“The Middle East route is still of significant importance for Europe 20 million bpd (barrels per day) goes through Hormuz. It is a real choke point,” the official said.
Each day around a fifth of daily global demand is shipped through the Strait of Hormuz. Western powers are nervous of an escalation that could lead to a blockade or increase the dangers of sailing through the narrow passage, where Iran has attacked and seized tankers in the past.
