Europe starts stockpiling oil as Iran conflict looms

European governments are rushing to boost stockpiles of crude oil and fuel, anxious to comply with new EU rules and amid reports that Israel is preparing to launch an attack on Iran.

Belgium and the Netherlands have issued tenders to import a total of around 250,000 tonnes of diesel and gasoline for delivery in September and October, their agencies said.

France has also bought diesel and awarded a crude oil tender this week while Belgium is increasing its crude stocks.

“This is yet another unexpected source of support for oil demand… [It] shows how the geopolitical concerns about Iran and Syria are bullish for oil even in the absence of an actual supply disruption,” said Seth Kleinman, head of energy research at Citi.

Iran tensions

European governments appear to be preparing for further supply disruptions in the Middle East as tensions have mounted between Israel and Iran over Tehran’s nuclear programme.

Israeli media have reported that Prime Minister Benjamin Netanyahu has decided to launch an attack on Iran’s nuclear facilities in the Fall.

Iranian President Mahmoud Ahmadinejad reacted on Friday, calling Israel a “cancerous tumour” with no place in a future Middle East, drawing an unusually strongly-worded condemnation by EU foreign policy chief Catherine Ashton.

Ashton is acting as chief negotiator for six powers – the United States, Russia, China, France, Germany and Britain – that are trying to persuade Iran to scale back its nuclear programme through economic sanctions and diplomacy. They fear Iran’s nuclear programme aims at producing weapons, though Tehran says it serves peaceful purposes only.

EU oil stock directive

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An EU directive passed in 2009 and designed to mitigate the impact of a supply crisis requires EU members to hold reserves equal to 90 days of average daily net imports or 61 days of average daily consumption ahead of a December 31 deadline.

One third of the stocks must be held in products, according to the EU directive.

“We are in the process of building stocks to meet our strategic obligations under the new EU rules,” said Alain Demot, general manager of Belgium’s Apetra, adding that more tenders would be issued in coming months.

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NEXT STEPS:

• 31 Dec. 2012: Deadline for member states to communicate measures taken under the EU’s oil stock directive. Under the directive, oil stocks must correspond “at the very least, to 90 days of average daily net imports or 61 days of average daily inland consumption, whichever of the two quantities is greater.”

Full article: Europe starts stockpiling oil as Iran conflict looms (EurActiv)

Israel ready for 30-day war after Iran strike

Israel is prepared for a 30-day war on multiple fronts should it decide to strike Iran, and is “ready as never before” for such a clash, the outgoing home front defence minister said Wednesday.

In an interview with the Maariv newspaper, Matan Vilnai said Israel was ready to face the consequences of a clash with Iran that could be sparked if the Jewish state decides to launch a strike against Tehran’s nuclear programme.

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“I can say in the most authoritative manner that the home front is ready as never before in the country’s history,” he said.

Vilnai declined to say whether he thought Israel should take military action against Iran, but warned any such decision required serious consideration.

“The only question is if a clash is necessary. War is something that is better to postpone and weigh carefully,” he said, adding that he thought the Jewish state should coordinate its military activity with Washington.

“I don’t want to be dragged into an argument, but I say that the United States is our greatest friend and we must always coordinate such things with it,” he said.

Full article: Israel ready for 30-day war after Iran strike (Defence Talk)