Greece’s Strategic Oil Reserves: A Safeguard Against Potential Shortages

Greece maintains strategic oil reserves capable of meeting domestic demand for at least three months, even in the worst-case scenario. As a member of the International Energy Agency (IEA), Greece is obligated to keep these reserves for any eventuality. Collectively, IEA member states hold 1.2 billion barrels of oil. In Greece, these reserves are stored at the facilities of the two refining groups, HELLENiQ Energy and Motor Oil. The last time quantities were drawn was in 2022, following the onset of the war in Ukraine. Then, the Committee for the Management of Serious Supply Disruptions decided to withdraw 303,000 barrels, or 0.5% of annual consumption, amid rising prices and market uncertainty. At that time, the decision was more economically driven to prevent price spikes. Typically, IEA prefers members to use these reserves only for energy-related reasons, such as actual supply shortages. Concerns have resurfaced with the potential closure of the Strait of Hormuz amid escalating tensions between Israel and Iran, possibly involving U.S. forces. Greek refineries receive significant crude oil supplies from Persian Gulf terminals and countries like Iraq. If necessary, they would need to seek alternative sources. Recently, Motor Oil’s President and Chief Advisor, Giannis Vardinogiannis, stated he is not currently worried but is closely monitoring developments. However, if the conflict escalates, there could be supply security issues. Similar statements are expected today from HELLENiQ Energy during its general assembly. It should be noted that unlike oil, Greece does not maintain strategic natural gas reserves due to the lack of large underground storage facilities. During the 2022 energy crisis, the EU mandated countries like Greece to store quantities in third-country facilities, but this obligation has since expired. Nonetheless, Greece does not fear gas shortages due to multiple supply sources, including Russia, Azerbaijan, and LNG via the Revythoussa and Alexandroupolis terminals. Consequently, its dependence on the Middle East and producers like Qatar remains limited.