European Commission urges expansion of oil refining capacity to tackle fuel shortages

The European Commission is seeking to reverse two decades of declining oil refining capacity across the European Union, Euronews reported on October 28. Energy Commissioner Dan Jørgensen warned that ongoing geopolitical instability and a prolonged squeeze on diesel supplies should serve as a wake-up call for the region. The European Commission is treating the loss of domestic refining capacity as a serious vulnerability that Europe can no longer afford to ignore. [1]

According to Euronews, energy prices are rising due to increased pressure on the global diesel market. This strain is being driven by the prolonged war in the Middle East, including strikes on Gulf refineries, as well as Ukrainian strikes against Russian oil facilities. Jørgensen stated that Europe must counter current trends to ensure adequate and flexible refining capacity both today and for the future. [1]

The warning follows wider energy market disruptions caused by the war between Iran and a coalition formed by the United States and Israel. The conflict led to the closure of the Strait of Hormuz, a key shipping route through which over 20 percent of global oil trade passes, triggering worldwide fuel shortages, panic buying, and price spikes for petroleum products. [2]

As FTMQ News reported earlier, the International Energy Agency warned that global diesel supplies will remain tight into 2027, driven partly by Iran war disruptions and falling inventories. FTMQ News also previously reported that European wholesale gas prices reached 97 euros per megawatt-hour in late October, marking their highest point since December 2022 amid cold weather and Middle East conflict. [4][5]