Serious global energy situation – but no fuel shortage in Sweden

During the two months that the war in the Middle East has been ongoing, the world has once again been reminded of how quickly geopolitical instability affects energy flows, with consequences for transport and trade. Since the outbreak of the conflict, the Swedish Energy Agency has been continuously analysing how the situation affects Sweden's energy supply.

"At present, there is no shortage, but we need to be prepared should the situation deteriorate. The longer the war continues and the Strait of Hormuz remains closed, the more long-term effects we will see. We are working to prepare for possible demand-reducing measures, with a particular focus on jet fuel," says Caroline Asserup, Director General of the Swedish Energy Agency.

The supply of petrol and diesel is good

From a global supply perspective, the situation is serious given the volumes of oil and liquefied natural gas (LNG) that normally pass through the Persian Gulf. However, a serious situation does not automatically mean that Sweden will face a shortage. Sweden and the Nordic region have relatively extensive refining capacity and primarily use oil from the North Sea. There is currently greater competition for that oil and prices have risen, but supply is not affected by the situation in the Middle East.

"The Swedish Energy Agency therefore assesses that the supply of petrol and diesel in Sweden is good in both the short and the long term. There is a low probability of any form of rationing of petrol and diesel in Sweden," says Caroline Asserup.

Some risk of a physical shortage of jet fuel

Some of Sweden's and the EU's jet fuel is normally imported from the Middle East. With the Strait of Hormuz closed, the absence of new deliveries needs to be compensated for. Reduced supply and altered flows increase the risk of disruptions and, in the event of an escalation or continuation of the conflict, may also affect Sweden and Europe.

"The Swedish Energy Agency assesses that there is some risk of a physical shortage of jet fuel which, in the worst case and over time, could lead to rationing. The situation largely depends on how the market acts and adapts, which in turn will affect what measures the government may need to take," says Caroline Asserup.

The Swedish Energy Agency's recommendation to the general public is to stay informed regarding travel and general conduct. The Agency is now analysing the measures that the European Commission presented last week in its AccelerateEU plan and is working closely within the EU and with the International Energy Agency (IEA) in order to coordinate actions.