Title: The Fuse | Europe's Oil Import Dilemma
Headings: Europe’s Oil Import Dilemma
Europe’s Oil Import Dilemma
Guest Post by Peter Kiernan | @peter_kiernan |
Peter Kiernan is Lead Analyst, Energy at the Economist Intelligence Unit
EU oil demand is substantial, but falling
As EU supply falls import dependence stays high
Dealing with oil demand
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Content: According to latest data from Eurostat, the EU’s oil import dependency rate in 2013 was 87%. Consumption has been falling, but so has production, and import dependence has grown from around 80% to nearly 90% over the last decade. The UK and (non-EU member) Norway are Europe’s two significant oil producers, extracting oil from the North Sea, and here production is declining. UK output fell from 1.7 mbd to 0.8 mbd between 2005 and 2014, while in Norway it fell from 2.9 mbd to 1.9 mbd during that period. Norway’s output is not counted as EU production, but the drop in UK output has led to a fall in the EU’s total output from 2.7 mbd to 1.4 mbd between 2005 and 2014, representing a drop of nearly 50 percent. Even by including Norwegian output as domestic European supply, Europe’s import dependence still only falls to around 80 percent. Europe is therefore facing a future of dependence on oil imports from outside the region. The bulk of EU oil imports originate from Russia, other FSU countries, and the Middle East and North Africa. Russia is a major exporter of oil to Europe, as it is for natural gas, and last year it was the source of 29 percent of the EU’s oil imports (around 2.9 mbd). Norway (13 percent), Saudi Arabia (9 percent), Nigeria (9 percent), Kazakhstan (6 percent) and Iraq (5 percent), Algeria (4 percent) were other major suppliers.