Oil: “no imminent shortage” in Europe due to war in the Middle East, says EU

There is no risk of “imminent shortage of oil supplies in Europe”, affirmed the European Commission on Monday March 9, regarding the impact of the war in the Middle East on energy.

“All Member States must have emergency stocks for 90 days. (…) Member States will have to inform the Commission when they release these stocks. To our knowledge, no Member State has done so yet,” said a spokesperson for the European executive Anna-Kaisa Itkonen.

This declaration comes as the finance ministers of the G7 (United States, Japan, Canada, United Kingdom, France, Germany and Italy) meet this Monday, under the French presidency, to discuss the use of strategic oil reserves to try to mitigate the surge in the price of a barrel, a consequence of the war in the Middle East.

En route to Cyprus on Monday morning, French President Emmanuel Macron told journalists “that the use of strategic reserves was an option being considered.” “Coordination of G7 heads of state and government this week on the issue of energy is under study,” he also declared.

Soaring oil prices

The meeting of finance ministers from these seven advanced economies was to take place by videoconference, at 1:30 p.m. French time, and should last one hour, said the French Ministry of Economy and Finance.

French Minister Roland Lescure will speak at the end of this G7 Finances in Brussels, before a meeting with his counterparts from the Eurozone (Eurogroup), while the price of oil has soared with the war in the Middle East and the blockage of the Strait of Hormuz.

Oil briefly jumped more than 30% on Monday, to nearly $120, sending stock markets plunging and reigniting fears of an inflationary shock. This outbreak moderated after the announcement of the planned use of strategic reserves.

According to the British daily Financial Times, the big financiers of the G7 “will discuss a possible joint release of oil from reserves coordinated by the International Energy Agency (IEA)”.

The IEA requires its thirty member countries to permanently hold oil stocks equivalent to at least 90 days of net oil imports, in order to cushion shocks such as a conflict in the Middle East that becomes protracted. France holds 118 days of stocks, Bercy said on Monday.