Europe rethinks oil refinery phase‑down as energy crisis adds €100bn to import bill
ITF Team1 min read
Europe has closed about a quarter of its refineries in two decades, raising fuel imports and prompting the EU to protect remaining capacity amid rising geopolitical risks.
Europe’s aggressive clean‑energy push has led to the shutdown of roughly 25% of its oil refineries over the past twenty years. While the transition has cut emissions, it has also increased the bloc’s reliance on imported fuels, a vulnerability that is now starkly evident as a fresh energy crisis adds more than €100 billion to Europe’s import costs.
Rising costs and security concerns
- The latest supply shock has pushed European gas prices above €101 per MWh for the first time since 2022, underscoring the continent’s exposure to external shocks.
- Houthi attacks on Saudi facilities and renewed tensions in the Middle East have reignited fears of supply interruptions, further inflating oil prices.
- EU officials say the added €100 billion import bill forces a rethink of policies that accelerated refinery closures.
Policy shift toward preserving capacity
- Brussels is now weighing measures to safeguard the remaining refining infrastructure, aiming to balance energy security with climate objectives.
- The EU’s strategy seeks to keep enough domestic refining to ensure military readiness, industrial competitiveness and a stable fuel supply for winter months.
What traders are watching
- Potential EU announcements on refinery subsidies or temporary extensions of operating licences could move Brent and European diesel spreads.
- Developments in the Middle East, especially any escalation of Houthi attacks, may trigger further price spikes.
- Monitoring the EU’s import bill trajectory and any new fiscal support for fuel pricing will be key for market participants.
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This article is compiled from international market news for information only. It is not investment advice.