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Europeans must prepare for an extended period of tight oil and gas supplies, the EU’s energy commissioner Dan Jørgensen told the Financial Times.
“This will be a long crisis . . . energy prices will be higher for a very long time,” Jørgensen told the FT, adding that with some “critical” products the situation was about to become “even worse in the weeks to come”.
The commissioner said that the crisis hadn’t struck yet but also admitted that “The rhetoric that we’re using and the words we’re using are more serious now than they were earlier in the crisis,” adding that “It certainly is our analysis that this will be a prolonged situation and countries need to be sure that they . . . have what they need.”
Yesterday, Jørgensen told an informal meeting of EU energy ministers that oil and gas prices will not return to pre-war levels soon even if the conflict in the Middle East were to end today. In financial terms, 30 days of conflict have already added $16.2 billion (14 billion euros) to the EU’s oil and gas import bill, the commissioner added.
In terms of supply, the situation appears to be most concerning in jet fuel and diesel. Europe is heavily dependent on jet fuel and diesel from the Middle East, so as supply got severely disrupted, prices soared, especially in jet fuel. Diesel prices, meanwhile, hit $200 per barrel this week, after three tankers carrying diesel from the United States to Europe switched routes and are now headed for Africa, Bloomberg reported Thursday. Another tanker that loaded diesel from the UK is en route to Australia, which is also suffering a massive fuel crunch.
“We are looking at all possibilities, and it’s clear the more serious the situation gets, the more, of course, we will also have to look into legislative tools,” Commissioner Jørgensen told the FT.