Government takes measures against possible oil shortages caused by sanctions against Russia
The government has a strategic oil stock that will provide 90 days of domestic consumption. That means that the stock of oil is enough to support vital processes for 90 days. Such a stock is necessary because on 5 December EU sanctions on Russian crude oil will take effect. From then on, the purchase, import and transfer of seaborne crude oil from Russia to the EU will be prohibited. Last year about 33% of the crude oil in the Netherlands came from Russia. Since the announcement of the sanctions, the market has been attempting to switch to importing non-Russian oil.
As of 5 February 2023, all Russian petroleum products will be banned. Partly as a result of this, it is expected that global oil prices will remain high for the time being and may rise further. No acute shortages of diesel or oil are expected.
The Netherlands uses Russian oil for a range of things, including the production of diesel and kerosene. Because the effects of the sanctions on the global market are hard to predict, this past summer the government preventively tasked the Netherlands Petroleum Stockpiling Agency (COVA) with increasing its strategic diesel stock.
Various ministries are now developing measures for the sectors that fall under their responsibility in the event that an oil shortage occurs and prices rise as a result. In particular, this includes the transport and shipping sectors, which rely on diesel. These measures are aimed primarily at lowering demand among individuals and businesses.
National oil crisis plan
In addition to increasing the oil stock, the Netherlands’ oil crisis plan is being updated. The current oil crisis plan was established in 2016 and will enter into force if shortages unexpectedly occur. The plan focuses on managing oil or diesel shortages for vital processes and provides insight into the downstream risks and social impact of such shortages. It puts forward different scenarios and sets out what can be done in each one. The process involves the various ministries and COVA, and also the relevant industry associations. The draft crisis plan will be completed in early December 2022.
The oil market is not regulated and is much more globalised than the gas and electricity markets. The options for managing a potential crisis situation are therefore limited. On the other hand, the oil market is very adaptable, owing in part to the many suppliers. As such, it is better able to deal with shortages.
The government has put together a list of tips (in Dutch) on how to conserve fuel in the face of rising prices.
Business owners can contact the Netherlands Enterprise Agency (RVO) sanctions helpdesk (in Dutch) with their questions and for advice regarding the sanctions against Russia and Belarus.