EU opens talks with refiners as diesel squeeze raises energy security concerns

The European Commission has opened talks with refiners to try to increase fuel output at existing plants, as Brussels warns that Europe's shrinking refining base is leaving the bloc more exposed to energy shocks. The move comes amid a prolonged squeeze in diesel supplies and wider geopolitical instability affecting global fuel markets. Officials say the issue is now being treated not only as an economic concern, but also as a matter of security.

Energy Commissioner Dan Jorgensen said the situation should serve as a wake-up call, pointing to the strain caused by the war in the Middle East and attacks on refineries in the Gulf, as well as Ukrainian strikes on Russian refineries. He said Europe needs adequate and flexible refining capacity both now and in the future. The Commission said around a quarter of EU refineries have closed over the past 20 years, reducing overall capacity by about 10%.

The talks were launched on Wednesday with European refiners, and further technical discussions are planned. Another meeting is scheduled for early 2027 to assess progress. The Commission said the industry had already put forward proposals, but it did not say whether those ideas involve reopening closed facilities, expanding existing plants or investing in new capacity.

Germany, Italy, Spain, the Netherlands, France and Belgium account for the largest share of the EU's refining capacity. The development matters because the EU is trying to secure not only crude oil supplies, but also the industrial capacity needed to turn that crude into diesel, jet fuel and other petroleum products. Brussels said the global diesel market is expected to remain tight well into 2027, according to the latest insights from the International Energy Agency.

That suggests fuel prices could stay under pressure even if crude markets become more stable. The Commission's warning also reflects broader concerns about resilience in Europe's energy system after years of refinery closures. Officials say refineries have helped maintain supplies so far, including jet fuel, but they are worried the bloc may not have enough flexible capacity to respond to another geopolitical shock.

The issue has become linked to competitiveness as well as security, especially for sectors that depend on steady fuel availability. What remains unclear is how quickly any increase in output could be achieved, and whether the industry's proposals will lead to new investment, plant expansions or other changes. The Commission has not given a timeline for decisions beyond the early 2027 review meeting.

For now, Brussels is signalling that it wants concrete steps to strengthen Europe's refining base before further disruptions hit the market.

#EuropeanCommission #refiningcapacity #dieselsupply #energysecurity #fuelprices