Oil price crisis could last months or years, EU’s energy commissioner warns

Lisa O’Carroll

Back in Brussels, the EU’s energy commissioner has warned that the oil price crisis could last months or years even if there is peace.

He has confirmed that the aviation sector could face the prospect of a shortage in jet fuel in the next five or six weeks.

“Jet fuel: this is the area now that is under most pressure and the IEA [International energy agency] has estimated that within five or six weeks we can have a real security of supply issue,” said Dan Jørgensen at a briefing unveiling emergency measures to deal with the crisis caused by the Iran war.

The EU imports 30% to 40% of its jet fuel needs, with about half coming from the Middle East.

Jørgensen said they had developed new tools in Brussels to ensure an “overview of refining capacity and stock in our diffeernt member states.

But he added: “But obviously we have to be quite honest and say that whether or not we will be a security-of-supply crisis is primarily a result of what goes on in the Middle East,” he said.

He warned that even if a peace deal is struck in the next few weeks between Iran and the US, the crisis will last months and perhaps years.

“We are looking into some very difficult months, or maybe even years depending on the development in the Middle East,” he said.

He argued:

“Take Qatar. It may take two years to rebuild its gas and transportation structure.

It means that the world market for LNG prices will not stabilise of even fall as was expected in the next couple of years.

Even a best case scenario is a pretty bad scenario for the months to come.”