EU warned to expand refining capacity as war-driven fuel shocks expose market vulnerability

The European Commission is being urged to treat refining capacity as a strategic weakness after a prolonged war in the Middle East highlighted how quickly fuel markets can be disrupted. Energy expert Osama Rizvi said high fuel prices have become a structural feature of the market, arguing that the world needs more refineries spread across the globe to reduce exposure during geopolitical crises. His comments came as the European Commission signalled that the loss of refining capacity is a vulnerability Europe can no longer afford to ignore.

European Energy Commissioner Dan Jørgensen said the prolonged conflict should serve as a wake-up call for policymakers. He said the European Union should make sure it has adequate refining capacity at home, reflecting concern that supply chains remain exposed when wars affect production, transport and processing. Rizvi said it could take months for supplies to recover and prices to fall, underlining the lag between disruption and market stabilisation.

The warning matters because refining capacity sits at the centre of how crude oil is turned into usable fuels for transport, industry and households. When refineries are concentrated in a limited number of regions, any conflict, shutdown or shipping disruption can ripple through international markets. The comments point to a broader debate over energy security, especially in Europe, where policymakers have been trying to reduce dependence on vulnerable supply routes and external processing capacity.

Rizvi described the situation as requiring a refinery revolution, suggesting that more processing plants should be distributed across different regions so they are less likely to be affected by one conflict zone. That argument reflects a wider concern that energy systems built for efficiency can become fragile when geopolitical tensions rise. The European Commission's response indicates that the issue is being viewed not only as a market problem but also as a resilience and security question.

The discussion also comes against the backdrop of repeated shocks to global energy markets in recent years, which have exposed how quickly prices can move when supply is constrained. In this case, the focus is not on a single outage but on the structural risk created by concentrated refining capacity. The remarks from both Rizvi and Jørgensen suggest that policymakers are being pressed to think beyond short-term price relief and toward longer-term industrial capacity.

What remains unclear is how quickly any policy response could translate into new refining investment, or whether governments will prioritise domestic capacity over other energy transition goals. It is also not yet clear which countries or companies would be expected to take the lead in expanding capacity. For now, the immediate message from the Commission and energy analysts is that the current system leaves fuel markets exposed when wars disrupt supply chains.

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