Decreasing output from North Sea oil fields will alter the supply pattern and quality of crude available in the EU. This decline will require EU refineries to import crude from farther afield, creating such logistical challenges as handling the slightly heavier grade and higher sulphur content of crude obtained from abroad. As a consequence, we can expect minor increases in refining costs, energy use and, hence, carbon emissions.

A number of refineries in North West Europe configured to process light, sweet [1] North Sea crude will need to seek similar supplies from other sources or invest in the conversion and hydro-treatment required to process heavier, sourer crudes. Light, sweet crude will mainly be supplied from Africa and the Caspian region, while heavier crudes will likely be “Urals-type” from Russia. Middle Eastern heavy crude will play a more prominent role at refineries located in Greece and Turkey.

By 2020, the total EU crude intake coming from North Sea supplies is expected to drop from the current 30% to 20%. However, due to the global nature of the crude market, the refining industry is not expecting any new difficulties in accessing appropriate crude supplies.


EU refiners may soon be facing supply reliability issues tied to pipeline links from Russia and the Caspian region, as well as to shipping from Russia’s Baltic ports and through the notoriously congested Bosporus Strait. In addition, large oil suppliers like Russia and Kazakhstan are planning new pipelines running to the East, which may prefer shipping crude towards Asia.

Moreover, several ports on the North African coast and in the Black Sea are susceptible to disruption from winter weather, and in recent years supply from West Africa has been hampered by several lengthy disruptions.

It is worth noting that some of Europe’s refineries are located along the Eastern EU border and thus are very reliant on fuel imports from countries lacking the EU’s intense environmental and climate regulations. Furthermore, the majority of the oil infrastructure in some of these neighbouring countries was built under very specific economic conditions, which resulted in relatively low energy efficiency, high environmental impact and a poor pipeline system.

Crude reserves

Based on current information about proven reserves, at current consumption rates crude will be available for close to another 50 years, but the ultimately recoverable resources are estimated to be much larger than current proven reserves.

Worldwide oil reserves have more than doubled since 1980, and over the last ten years have increased by one third. In 2009, proven reserves amounted to 1,354 billion barrels of oil. This number consists mainly of conventional crude oil, but also includes unconventional oil, natural gas liquids and condensates. The International Energy Agency (IEA) estimates that, at today’s rates, all global proven conventional and unconventional reserves add up to approximately 46 years of production, but new discoveries are still being made. For example, between 2000 and 2009, oil from new extraction sites replaced every second barrel produced.

Furthermore, any increase in the price of oil would mean that more could be recovered at a profit. The IEA estimates that should conventional oil production peak in the near future, the resources of LNG and unconventional oil would be great enough to ensure that total oil production continues to increase for several decades.

Globally, oil production will shift to countries dominated by national oil companies, which are expected to provide all growth in global production – provided that sufficient investments in exploration, development and production are in place. Supply growth will mainly come from OPEC countries, in addition to other regions countries such as the Caspian and Brazil.

[1] Crude oil contains sulphur. The sulphur content of different crude oils can vary significantly with sweet (low sulphur) Saharan crudes such as Algerian Zarzantine containing as little as 0.07% and sour (high sulphur) Venezuelan crudes such as Boscan containing as much as 5.50%. Sulphur is removed from oil products by a process called hydrotreating. This process involves vaporising the oil product in the presence of hydrogen and a catalyst. The reactions that occur enable the sulphur to be extracted from the oil product.