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: The Fuse | Europe's Oil Import Dilemma
Europe’s Oil Import Dilemma
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Guest Post by Peter Kiernan | @peter_kiernan |
Peter Kiernan is Lead Analyst, Energy at the Economist Intelligence Unit
Europe’s status as a substantial importer of energy is well known, but what is less known is that the rate of dependence on oil imports is much higher compared to its dependence on imports of natural gas. Europe’s status as a substantial importer of energy is well known, but what is less known is that the rate of dependence on oil imports is much higher compared to its dependence on imports of natural gas. While the European Union (EU) imported about two-thirds of its natural gas supplies in 2013, it imported nearly 90 percent of its oil needs in the same year. However, Europe’s energy security concerns mainly focus on its dependence on natural gas imports, mainly because of the heavy concentration of imports among few suppliers and infrastructure constraints on for diversification. Given that the global oil market is fungible, the energy security implications of Europe’s high rate of oil import dependence are generally not seen by policymakers to be as acute compared to natural gas. Yet, Europe’s oil supply and demand balance is a significant issue regarding Europe’s energy future. As the largest oil importing region it is vulnerable to sizable supply shocks and price volatility. There may be little prospect in the foreseeable future to reverse falling oil production, but demand-side solutions can be more actively deployed to reduce the region’s dependence on imports, addressing policy objectives regarding energy and economic security. EU oil demand is substantial, but falling
Europe’s oil demand and supply picture needs to be put in context. The EU is the world’s largest oil-importing region.