A “perfect storm” in the oil market
Today’s situation in the global oil market is a “perfect storm” for oil producing countries, but for countries importing petroleum products, it presents an opportunity to stock oil on the cheap.
Ukraine may also take advantage of the situation when oil prices are low, and in some cases can even drop below zero. In the conditions of high dependence on imports, creating stocks of oil and liquid fuel can protect domestic market against sharp price fluctuations and delivery crises. Therefore, the incumbent government has the chance to not only strengthen the country’s energy independence but also protect consumers. Unfortunately, past governments failed to capitalize on the opportunity to create minimal stocks of crude and petroleum products as required by Directive 2009/119/EC mentioned in the Association Agreement and by the Energy Strategy of Ukraine. The Cabinet of Ministers still didn’t approve the prepared minimal stock model and the relevant draft law.
At the same time, even in the absence of this institutional framework and preparatory technical measures, it is still possible to create oil stocks even today, on the basis of the State Reserve Agency’s storage facilities and Ukrtransnafta JSC’s oil depots. In order to take this first step toward creation of sufficient stocks, all that is needed is political will and relatively small (for now) financial resources.