Overcoming supply crises

Oil reserves and international tensions

oil reservesAs crude oil has become the primary energy source in developed countries, crude oil reserves are very precious as history has seen crises where the assurance of supplies has been put into question: closing of the Suez Canal, embargo of Arab countries during the Israeli wars, invasion of Kuwait or occupation of Iraq. Even today, the mission of SAGESS is undertaken in a context of tension in oil markets and increasing threats on world supply flows for importing countries (piracy in Asia-Pacific, political conflicts in Latin America, civil wars in Africa…). SAGESS must act within imbalances both on a global scale (growth of world oil demand, 2/3 of the crude oil reserves held by OPEC countries, uncertainty on the future price of oil products…) and at national level (drop in use of oil products, distortion between products consumed and refined in France, greater consumption of gas oil with a greater production of gasoline, difficult substitution of oil in certain oil sectors…).

A mechanism tested for managing supply disruptions

During the supply crises in the United States due to disruptions in American refineries following hurricanes Katrina and Rita in 2005 for example, SAGESS responded to the IEA’s request to make its strategic crude oil reserves available. At national level, by permanently maintaining stocks of commercial oil products, the CPSSP/SAGESS system plays a crucial role in crisis management, by quickly providing products under injunction and coordinated by the Ministry for Energy. In the event of a shortage of oil products, consumers are mainly concerned with their car supplies. Thus, in recent years, particularly during the autumn 2010 and spring 2016 crises, SAGESS was able to use its strategic reserves.

Managing crises managing information

Finally, to handle a supply crisis also means handling information. Shortages are often made worse, and in some cases even caused, by rumours. It is essential for the International Energy Agency (IEA) and public authorities to know how to communicate during such periods. It is also the role of the CPSSP/SAGESS system to communicate with its ministry in charge on the conditions of strategic stocks, their location and their availability.