Importing fuel from outside the EU – the geopolitics behind the craving
Over the years, the EU has become increasingly dependent on crude oil imports. These accounted for over 88% of the region’s total oil consumption in 2014, compared to 76% in 2000.
Russia accounted for one third of EU imports of crude oil to the EU in 2015, followed by Norway (12%), Saudi Arabia (8%) and Nigeria (8%).
Through its imports, the EU is highly dependent on regions with high geopolitical instability. According to data published by the World Bank, Northern Africa is the region with greatest geopolitical risk, closely followed by Russia and the Middle East. Iraq, Libya and Nigeria are among the countries with the highest risk of geopolitical instability that also export large volumes of crude oil to the EU.
The report also assesses for the first time which companies, instead of countries, benefit from the EU’s oil imports. Over 80% of the imported crude oil in 2014 was supplied by non-European companies. Rosneft and Lukoil are the biggest beneficiaries, together they receive around a third of the EU’s oil import revenues or over €60bn.
The transport sector is the biggest driver of oil demand at EU level – two-thirds of final demand for oil comes from transport. In 2014, road transport accounted for 54% of final demand for petroleum products. Reducing the EU’s energy dependency and decarbonising transport are two sides of the same coin. The EU needs to reduce its demand for crude oil and petroleum products in the transport sector if it wants to reduce its energy bill and its reliance on geopolitically and environmentally risky oil imports. Implementing a strong decarbonisation strategy for transport will not only permit the EU to address energy insecurity, it will also bring climate, environmental and economic benefits in the long-term.