Europe's Energy Reserves Pass the Test, But Gas Poses a Bigger Threat
Europe's energy reserves proved effective during the latest crisis, but their limitations are becoming increasingly apparent.
The closure of the Strait of Hormuz led to price increases, shipping route changes, and concerns over fuel availability. However, Europe did not run out of oil or diesel due to decades of mandatory stockholding, coordinated emergency planning, and alternative supplies.
Europe contributed around 107.5 million barrels to the International Energy Agency's (IEA) largest coordinated stock release in history, with approximately 68% consisting of refined petroleum products and only 32% being crude oil.
This response was logical as releasing diesel or jet fuel can address product shortages faster than crude oil. Europe has a specific vulnerability in aviation, with around 70% of its jet fuel consumed in the bloc produced by EU refineries and the remaining 30% imported.
Despite concerns over import dependency, emergency stocks, rerouted cargoes, refinery flexibility, commercial inventories, and demand adjustment kept the market supplied. However, Europe's oil buffer has become thinner, and governments face a more difficult decision to authorize another coordinated release.