News Markets Media

USA | Europe | Asia | World| Stocks | Commodities

Home Markets Commodities MEPs Call for Member States to Maintain Minimum Stocks of Crude Oil

MEPs Call for Member States to Maintain Minimum Stocks of Crude Oil
added: 2009-04-23

Crude oil is one of the main energy sources of the EU, and is likely continue to be for several decades. The Commission estimates that in 2030, European demand will be one third higher than it was in 2006, which is of concern as demand was already outstripping supply in 2006. Therefore, the European Parliament is calling on Member States to maintain minimum stocks of crude oil as a barrier to protect against any unexpected cuts in supply.

MEPs are concerned that a sudden shortage of crude oil could be extremely damaging to the economies of Member States, and that could also "compromise" national military capabilities. The risk of an unexpected shortage of oil has increased in recent years due to increasing global demands, the concentration of oil supplies in often unstable areas and decreasing resources within the European Union. In light of this, the report drafted by Miloslav Ransdorf (GUE/NGL, CZ) calls for increased energy security and more effective monitoring of oil stocks in the EU. The report was adopted with 629 votes in favour, 24 against and 8 abstentions.

Increasing energy security in the EU

The Commission is calling for minimum national stocks of 90-days worth of crude oil supplies. In the view of the rapporteur, the actual levels of need during a crisis, will only become apparent after the shortage, and that 90 days should be "sufficient to cover any conceivable non-politically-motivated disruption of supply." If a crisis lasts longer than this, then the world-wide problems caused by this would require other responses.

Currently many Member States hold some of their oil reserves in the infrastructure of other states; for example, in 2007, Denmark, Ireland and Sweden all held part of their stocks in the UK. Whilst the report sees this as generally positive, it is calling for further legislative clarification of bilateral agreements between states, to ensure that in the event of a crisis, oil stocks can be delivered quickly and efficiently.

Monthly or weekly reporting?

Across most parts of the world, oil stock summaries are reported on a weekly basis, but this is not the case in the EU where monthly summaries are still used. MEPs believe that whilst weekly reporting would provide better information, this would only be effective if the reports are entirely accurate and do not require further corrections. Therefore they support the feasibility study launched by the Commission, which will investigate the possibility of weekly reporting on commercial oil stocks. The European Parliaemnt urges caution on making any further decisions about reporting until after the results of this study have been published.

Cooperation with international organisations

All but eight of the EU Member States are also members of the International Energy Agency, which means that the Commission should ensure that these members are "involved on an equal footing as regards the decisions adopted" by the EU in conjunction with the IEA. The Commission should also ensure that the interests of all Member States should be equally upheld. Finally, the House urges the Commission to work closely with other international bodies which have the power to release oil stocks so that "multilateral and bilateral coordination on these matters" is strengthened.

Source: European Parliament

Privacy policy . Copyright . Contact .