An EU review of its oil stockpiling policy is unlikely to raise the volume of emergency reserves that member states are required to hold, though it may alter their composition, according to a consultation note and sources familiar with the discussions.

In a July discussion document seen by Platts, part of S&P Global Energy, the European Commission acknowledged that the Middle East conflict had revealed "concrete operational failures" in the bloc's oil security framework and suggested the need to expand its buffer through an expedited policy review.

"The crisis has shown that the EU must be prepared for longer-duration oil supply disruptions," the note stated. "It has also shown the dependence of the EU on jet fuel imports."

The rules under review stem from Directive 2009/119/EC, which for nearly two decades has required member states to maintain oil stocks equivalent to 90 days of net imports or 61 days of consumption, whichever figure is higher. That directive was itself built on the emergency stockholding framework the International Energy Agency established in the aftermath of the 1973 oil crisis, when producer embargoes exposed importing countries' vulnerability. Under current EU rules, one-third of those reserves must consist of refined oil products, with the remainder permissible as crude oil. The Commission consulted experts on its stockpiling policy on July 2 and July 23 and is expected to put forward amendments later this year.

However, political and fiscal constraints are widely expected to limit the scope of any legislative overhaul. Market sources cautioned that the minimum 90-day net import requirement will most likely stay in place.

Policy Review

Ravi Bhatiani, executive director of the Federation of European Tank Storage Associations (FETSA), warned that the consultation could "easily have an underwhelming outcome."

"Our worry as an organization is that the moment the pressure is off because you seem to be exiting the crisis, that's the same moment that politicians basically lose all ambition," Bhatiani said. He added that reforms could pose a "fiscal headache" for governments.

The European Commission did not respond to requests for comment.

FETSA, whose members operate nearly 800 terminals across Europe, has pushed for higher stock mandates to address escalating geopolitical risks, Europe's growing import dependence, and emerging security threats. That import dependence has deepened as North Sea oil production, historically a major domestic source for European refiners, has declined steadily over the past two decades.

Government officials, however, have shown little appetite to revisit the threshold.

"We do not see any clear reason to lift the 90-day net imports baseline," a spokesperson for the Netherlands' Ministry of Economic Affairs and Climate Policy said. The Netherlands is among the EU's larger stockpilers.

Maurits Kreijkes, Group Market Intelligence manager at Evos, a Dutch storage operator, offered a similar assessment: "At this stage, the Commission appears to be gathering information rather than steering towards an increase in the current 90-day stockholding requirement."

Instead, reforms may center on broadening the directive's scope to encompass products such as biofuels and future energy carriers, Bhatiani noted. The Commission's consultation stressed the importance of factoring in the energy transition, while acknowledging that oil still accounts for 38% of Europe's energy mix.

The consultation also identified military fuel needs as a specific area requiring protection. NATO and EU member states have previously called for distinct stock requirements for diesel, jet fuel, and gasoline, and have recommended that military stocks be separated from civilian reserves.

Bhatiani expressed confidence that the Commission would extend the directive to include newer fuels such as biofuels and future energy carriers. He also urged a shift in stock composition toward refined products over crude.

According to the International Energy Agency (IEA), Europe had drawn down 63 million barrels of oil from emergency reserves by July. Key hubs such as the Netherlands have since announced their first draws.

Energy Security Drive

Europe's potential reluctance to increase reserves in absolute terms stands in contrast to other regions. India, South Africa, and Pakistan have all laid out plans to expand their stockpiles.

Traders anticipate that a scramble to rebuild depleted inventories—and potentially enlarge them—could underpin global oil demand for at least a year after the conflict eases, with knock-on effects for prices.

In the three weeks following the US-Iran memorandum of understanding in June, which helped calm crude markets, global stock injections averaged 3.9 million barrels per day, according to Goldman Sachs. China has also been known to accelerate stockpiling even when market structures would typically encourage draws, a pattern notably observed after the 12-day Israel-Iran war in 2025.

"Some major producer countries are also looking to rebuild their stocks in locations outside of the Strait of Hormuz, closer to their major consumer markets," said Saad Rahim, chief economist at global commodities trader Trafigura.

Storage Economics

Whether Europe is prepared to absorb the costs of a new storage model remains an open question. Member states are typically granted several years to transpose new mandates into national law.

In a special 2018 report, the IEA argued that oil stocks can deliver up to $1 trillion in savings for net-importing countries during supply shocks, helping offset GDP losses and elevated import costs. Even so, constructing a new 500,000-cubic-meter oil terminal was estimated to cost €50 million, with an additional €200 million required to fill it with a mix of 70% crude and 30% products.

Shifting storage composition further toward refined products would raise inventory costs, as products such as Jet A-1 demand higher-specification infrastructure. Proponents have suggested that collective ownership models could provide one pathway, as could allocating defense budgets toward new strategic reserves.

In July, NATO members pledged to invest €27 billion ($31 billion) in fuel storage and distribution infrastructure, though details remain limited.

FETSA's Bhatiani also called for private-sector operators to be assigned "risk preparedness" obligations, advocating a framework akin to the EU's Critical Raw Materials Act to modernize stock requirements.

"At the moment, they're designed for things like refinery interruptions, temporary closures of something like the Suez Canal for a few days," he said. "They are not designed for dealing with the geopolitical transition that we are going through."

Source: Platts, S&P Global Energy