Saturday

6th Mar 2021

EU asks for help to guarantee energy supplies

The EU’s energy commissioner, Andris Piebalgs, has called on the oil cartel, Opec, to restart talks to raise the production ceiling of oil by half-a-million barrels a day.

During a two-day summit between the EU and the Gulf Co-operation Council in Kuwait over the weekend, the Commissioner pushed for increased oil production and asked for help to guarantee the continent’s future energy supply, the Financial Times reported.

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The call came as US oil prices hit a new record overnight of $57,70 a barrel, up 65 per cent from April last year.

"There is no crisis but [it is] not so comfortable a situation because competition for resources has increased," Mr Piebalgs was quoted saying.

"We should find the right policies – long-term and sustainable policies", which he said include diversifying sources and developing alternative forms of energy, along with a greater emphasis on reducing demand.

Opec President Sheikh Ahmad al-Fahd al-Sabah indicated on Saturday (2 April) he might start consulting member producers over a 500,000 barrel-per-day (bpd) increase to help cool the market, according to Reuters.

When Opec (the Organisation of the Petroleum Exporting Countries) met in mid-March it was decided to raise oil production by 500,000 barrels a day. But the increased production has failed to bring prices down as competition among oil consuming nations is growing.

By 2030, the EU’s dependence on energy imports is expected to rise to 90 per cent for oil and 70 per cent for gas, according to the Financial Times.

"I've always doubted Opec's ability to ramp up production,'' said Gal Luft, executive director of the Institute for the Analysis of Global Security, according to Bloomberg.

"Those who believed Opec all these years are eating their hats now. Fifty dollars a barrel is a fond memory now, and $60 is just a matter of time.''

The EU and Opec are set to hold a ministerial summit in Brussels in June.

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