Posted on 09/06/2005 4:31:12 AM PDT by David Hunter
BRUSSELS - The EU is set next week to discuss its strategy for tackling the current problems caused by soaring oil prices, as several member states have suggested they are ready to release their stockpile reserves to the US or world markets.
"We are in contact with them and whatever they ask for they will be given, from reserves of oil that different countries have provided, to any other thing that they may need", EU foreign chief Javier Solana said on Friday (2 September) in Wales.
However, his statement seemed to contradict an earlier announcement by the British foreign minister Jack Straw, who was reported as suggesting the bloc would offer humanitarian aid, rather than oil.
Global effects of Katrina
With the price of oil already having risen significantly over the summer, the markets were further affected by the natural disaster caused by hurricane Katrina in the southern part of the US on Monday.
In terms of oil production, Washington is reported to have lost about 5 million barrels of its petrol due to refinery damages, but the real figures are expected to rise several fold.
In a bid to prevent a further surge of oil prices, Germany, France, Spain and Italy announced recently that they were prepared to release their petrol stocks.
Most of the EU member states - the "old" 15, plus Hungary and the Czech republic, are members of the International Energy Agency (IEA), which coordinates release in emergency situations.
The IAE was reported as waiting for the US' approval to trigger the emergency procedure, along with its evaluation of the natural disaster.
Reports of foreign reserves being made available to the US led to a slight drop in oil prices on Friday.
Meanwhile, the EU will also debate its common approach, as all the bloc's member states form a so-called "oil supply group", which is to meet next Friday (9 September).
The union has its own regulations on how to deal with the oil supply and the release of its reserves, based on its 1973 directive.
However, while the European Commission can coordinate their action, "in the strict sense, it is up to the individual countries to decide what measures they will take", a commission spokesperson told journalists on Friday (2 September).
"If in the meantime there will be some announcements by the IEA, then there will be some repercussions on their debates", she added.
Germany holds the largest petrol stock in public storage, which is the easiest and fastest to reach markets.
Altogether, Europe has around 168 million barrels of petrol reserved for emergencies, of which 53 million are public stock.
IEA rules
IEA net oil importing countries have a legal obligation to hold emergency oil reserves equivalent to at least 90 days of net oil imports of the previous year.
Among the 17 European members of the Agency, only Denmark and the UK stand as oil-exporting states, which are not under such obligations.
However, all EU states are obliged to hold their stocks under consumption-based union's regulations, which in practise marks the difference between the European and IEA rules.
According to the European Commission, the EU has well above the minimum quantity of oil reserve. On top of the 90 days minimum requirements, the EU has on average between 115 and 150 days supply in reserve.
Our gas dropped 20 cents a gallon in Upstate NY on Sunday to 3.19. I expect it to be even lower this am. Patience not panic.
Welcome news indeed - and maybe time for just a little 'kiss and make up' with 'old' Europe. I know plenty of FReepers seem pretty indifferent to Europe, but as a Yank long resident in England, I have a different perspective...: )
Wildly off-topic, but it was striking to hear this morning that an analysis of the 2001 Census shows that the number of US-born immigrants to the UK exceeds the number born in Bangladesh. Rather different from the mental picture of British society held by most Freepers, I think.
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