Analysis: Europe most exposed to U.S.-Iran war fallout, with oil reserves for less than 30 days of demand

Europe faces the greatest risk of energy supply disruptions stemming from a potential conflict between the United States and Iran, according to a Reuters analysis. This vulnerability is largely due to the region's diminished refinery capacity, making it more dependent on oil shipments from the Middle East that must transit the Strait of Hormuz.

European nations have recently boosted imports of jet fuel from the U.S. and Asia, while also increasing domestic refinery production and drawing on existing stockpiles to ensure uninterrupted air traffic. However, these efforts have not fully mitigated the risk. Data from the consultancy Energy Aspects indicates that Europe could face a deficit of nearly 600,000 barrels of oil per day in the third quarter of this year.

The analysis highlights that Europe's current oil reserves cover less than 30 days of demand, the lowest among major jet fuel markets. In contrast, the U.S. has a surplus of approximately 116,000 barrels daily, and the Asia-Pacific region has an estimated surplus of about 425,000 barrels per day. The European Commission has acknowledged that the situation could worsen if supply disruptions continue or intensify.

The reliance on maritime transport through the Strait of Hormuz, a critical chokepoint for global oil trade, has become particularly precarious following the escalation of tensions between the U.S. and Iran and recent attacks in the region. Countries like the United Kingdom, France, and Germany are identified as being especially exposed to these risks.