Energy Commissioner Dan Jorgensen has asked EU member countries to consider energy-saving measures, particularly in the transport sector, in order to limit fossil fuel consumption in view of a possible disruption of supplies from the Persian Gulf.
COMMISSIONER JORGENSEN’S LETTER
In a letter to the Energy Ministers of the European Union member countries, seen by Politico, Commissioner Jorgensen urged governments to consider introducing “voluntary demand reduction measures […] with particular attention to the transport sector.” This means, in other words, that citizens could be asked to limit car travel or give up air travel in order to conserve fuel for other more essential purposes.
Brussels’ request recalls the 1970s, when the oil crises forced European governments to ration gasoline and ban car travel on Sundays.
THE CRISIS IN THE PERSIAN GULF BECOMES “PHYSICAL”
The European Commission’s recommendation is a sign that the logistical crisis in the Persian Gulf, triggered by the US and Israel’s attack on Iran, is moving from the “economic” dimension to the “physical” one: not only will we pay more for energy, but we also risk not having enough. Since the war with Iran could last a long time, and might even spread to the Red Sea, Commissioner Jorgensen believes that EU countries should “prepare in advance for a potentially prolonged disruption” of supplies.
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EUROPE’S DEPENDENCE ON THE PERSIAN GULF AND THE REFINING CRISIS
In the letter, Jorgensen explains that the European transport sector is facing rising prices and possible supply shortages due to the EU’s heavy dependence on the Persian Gulf: this region accounts for over 40 percent of the bloc’s imports of jet fuel and diesel. The difficulties are worsened by the “limited availability of alternative suppliers and refining capacity for specific products within the EU,” the commissioner wrote.
In Europe, refining capacity – that is, the availability of plants capable of converting crude oil into gasoline, diesel, and other derivatives – has long been in crisis: few refineries manage to reach break even, meaning the condition where revenues equal expenses, having to cope with high energy prices and CO2 quotas.
THE CONSEQUENCES FOR THE EUROPEAN AIR TRANSPORT SECTOR
On March 27, the Financial Times reported that due to the blockade of the Strait of Hormuz, European imports of jet fuel could drop to 420,000 barrels per day, 40 percent less than the previous week and the lowest level ever recorded in March since 2022.
Jet fuel stock levels in Northwestern Europe are declining but remain in line with February 2024 values. However, according to Insights Global, the rate of withdrawals from reserves could accelerate due to the drop in shipments from the Middle East. There is a possibility that, by the end of April, airlines may decide to reduce flights – possibly prioritizing the most profitable routes – if supply difficulties persist.
