Prepare for ‘long-lasting’ energy shock, EU energy commissioner warns Europe

BRUSSELS — The EU is assessing “all possibilities” including fuel rationing and releasing more oil from emergency reserves as it braces for ‌a “long-lasting” ‌energy shock from ‌the ⁠Middle East war, the ⁠Financial Times reported on Friday quoting the bloc’s energy commissioner.“This ‌will be a ‌long crisis … ‌energy prices will be higher for a very long ‌time,” Dan Jørgensen told the ⁠FT in an interview. He warned that for some more “critical” products “we expect it to be even worse in the weeks to come”.The near closure of the crucial Strait of Hormuz waterway and strikes on energy infrastructure in the Gulf have created chaos in global energy markets, sending prices soaring and prompting long-term supply fears. Airlines have raised particular concerns about jet fuel supplies.“The rhetoric that we’re using and the words we’re using are more serious now than they were earlier in the crisis,” Jørgensen said. “It certainly is our analysis that this will be a prolonged situation and countries need to be sure that they . . . have what they need.”He said that while the EU was “not in a security of supply crisis, yet”, Brussels was drawing up plans to tackle “structural, long-lasting effects” of the conflict.This included “preparing for the worst scenarios” even if the bloc was “not there yet” on needing to impose rationing of critical products such as jet fuel or diesel. “I mean, better to be prepared than to be sorry,” Jørgensen said.Asked about the possibility of weakening jet fuel regulations to permit more US imports, or allowing more ethanol blending for automotive fuel, Jørgensen said “we’re not there yet where we have remedied or changed any of our current rules”.But he added: “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.”The EU and US have differing standards for jet fuel. Jet fuel in the EU has a freezing point of -47C, while in the US it is -40C. Jørgensen also said he “will not exclude” another release of strategic energy reserves “if the situation becomes more dire.” EU countries took part in the largest release of strategic oil reserves in history last month, in an attempt to tame soaring prices.Jørgensen would not share the EU’s “exact analysis” on when a new release might be required but said “we are taking it very seriously and we are ready to do it when and if it becomes necessary”.“We need to keep our possibilities open, and if this is indeed, as I project, a long-lasting crisis, then we need those tools also at a later stage,” he added. “It needs to be done at the exact right time, and it needs to be proportionate.”Jørgensen also reiterated his position that there would be no change to EU legislation to end Russian liquefied natural gas imports this year. He said that relying instead on the US and other partners to provide additional supplies was acceptable as they operate in “the free market”.