Germany is stockpiling a legally defined, so-called “strategic oil reserve” in order to be prepared for supply bottlenecks in the event of any crisis events. The supply of oil, gasoline and diesel should be enough for 90 days.
The quantity required for this is calculated from the average three-month import of the last three years. Now, even before February 24, the start of Russia’s attack on Ukraine, the stockpile has reached its lowest level since 2015.
Federal Government releases part of the strategic crude oil reserve
On March 2, in response to the Ukraine war and to dampen the resulting price increases on the international oil markets, the German government released part of Germany’s oil reserve for sale. As the Paris-based International Energy Agency (IEA) of the OECD announced, its 31 member states should release a total of 60 million barrels – equivalent to 9.54 billion liters – of crude oil. Since the Federal Republic of Germany has a share of 5.4 percent of the total oil consumption of the IEA countries, Germany wanted to participate accordingly with 434,000 tons of oil in this international release program.
But the low point in stockpiling in Germany had already been reached a month earlier. As the Hamburg Senate announced in response to a small request from the AfD parliamentary group, a total of 22.6 million tons of crude oil, heating and fuels were stored in Germany on 31 January 2022. Ten months earlier, on 31 March 2021, national reserves had identified 23.3 million tonnes of so-called crude oil equivalents.
It is quite normal that the number of stocks fluctuates at all over time. This is also due to the fact that no fixed amounts of reserves are fixed. The reserves are based on the averages of recent years, which vary considerably. The previous historical minimum was reached on 31 March 2018 at 22.7 million Tonnes. In contrast, the highest stock of oil and oil products in German tank farms and caverns to date was 23.6 million Tonnes. This status was established in March 2016.
Petroleum Stockpiling Association Manages Strategic Oil Reserve
In Germany, the responsibility for securing the strategic oil reserve and its management lies with the Petroleum Stockpiling Association (EBV). The basis for the stockpiling and the work of the association is the “Law on the Stockpiling of Crude Oil and Petroleum Products”, called “ErdölBevG” for short. The EBV, which has its headquarters at Jungfernstieg in Hamburg, is a corporation under public law. All German companies that import or process oil are mandatory members of the association, which was founded in 1978. Since 1966, these companies have been legally obliged to create a strategic emergency oil reserve at their own expense to supply Germany in times of war and crisis. Since storage is not exactly cheap, the price of heating oil, gasoline and diesel includes a so-called “stockpiling contribution”. This is about 0.5 cents per liter. The EBV may only sell its reserves on the instructions of the Federal Minister for Economic Affairs and only at the prevailing market price, whereby the IEA and the European Union have a say.
Deposits spread all over Germany
The EBV deposits are distributed throughout Germany. Crude oil is stored in specially designed underground caverns in salt formations at depths of 1,000 to 1,500 meters. These are mainly located in the north of Germany. The reserves of petroleum products, such as heating oil, diesel and gasoline, are stored above ground in tank systems. These are distributed throughout Germany in order to be able to react to regional supply disruptions. Storing petroleum products generally has the advantage that they are quickly available for use because they are already refined.
In addition to this state reserve, there was originally a so-called “Federal Crude Oil Reserve”, which, however, was sold in 1997 by order of the Federal Government.
via Blackout News
April 7, 2022