The oil stockholding obligation

Belgium needs to hold strategic oil stocks following the European Directive 2009/119/EC and the International Energy Programme of the International Energy Agency. The entirety of this national obligation is delegated by the federal State to the agency ASEVA.

How much strategic oil reserves ASEVA annually at minimum needs to manage depends on the Belgian net imports of oil products in the previous year. With the exception of naphtha used for non-energy purposes, all national oil consumption is taken into account, being it for transport, heating or industrial use.

The 2023 national stockholding obligation, which is valid until 30/6/2024, amounts to some 3,3 million tons crude oil-equivalent. The 2024 obligation will be some 7% higher, equalling the stockholding obligation of 2019.

Except for the sudden decline in 2021 (due to the sharp decrease in motor fuels consumption caused by the lockdowns during the Covid pandemic) the national oil stockholding obligation shows a stable pattern.

However, given energy transition policy, national oil consumption will over time decline. ASEVA will adapt the stocks managed to this evolving obligation and, may in future, subject to a decision of the federal government, store additional energy stocks that become important in this energy transition.

The security stocks managed by ASEVA

The current security stocks are all oil stocks and amount to some 3,92 million tons. They consist mainly of stocks of crude oil (53,7 %) and diesel, heating oil, jet fuel and eBOB (the non-biocomponent of gasoline) owned by ASEVA and stored in storage facilities in Belgium and the neighbouring countries. The crude oil can, in a crisis situation, be refined into the desired petroleum products. The finished oil products, which are mostly stored in Belgium, are the first line of defense and meet the national of international product specifications.

To a marginal extent the security oil stocks consist of stocks from the oil industry which ASEVA reserves by means of ticket contracts. These contracts give ASEVA in case of a crisis the right to buy the underlying oil products.

The repatriation of stocks located abroad is guaranteed by treaties between Belgium and the other EU Member states.

What does this management entail?

To build up its oil stocks, the agency entered into conventional loans and bonds in the past. These loans are now being phased out in a systematic manner.

In order to store the purchased stocks, storage contracts are negotiated with storage operators in Belgium and the neighbouring countries. The storage facilities where ASEVA stores need to meet strict criteria as to permits, insurance and management.

For the quality and quantity inspection of its stocks purchased and stored, ASEVA has partnerships with recognized inspection companies. In case the stocks are stored in a segregated manner, i.e. when they do not rotate together with commercial stocks, special attention is given to the follow-up of their quality (as the quality of oil products degrades over time). To this end ASEVA implements a follow-up system developed between stockholding agencies that measures by means of analyses performed in laboratories the conformity of the product in tank. This system makes recommendations concerning the durability of the stocks and allows the agency to replace the products in its tanks before it starts degrading.

Such product replacement equally takes place when (inter)national quality standards for a given oil product become more stringent.

The oil products are all-risk insured, including against environmental damages and terrorist acts.

The stocks managed in order to meet the stockholding obligation are reported to the Belgian energy administration and the competent authorities of other countries in which they are stored. These authorities, in turn, report ASEVA’s stocks to the European Commission and the IEA.