EU Energy Policy Blog

Over the last few years we have been observing an irrational political confrontation between European and Russian energy strategies, something not even heard of at the times of the USSR. So let’s look at the irrationality of these confrontations from an economic perspective. Yes, Russia and Europe participate in a kind of monopolistic-monopsonistic relationship (where each side either has control of supply or control of demand) – these are naturally prone to debates about the division of the economic surplus, as both sides want to get the best possible deal out of it. But it should be possible even in these circumstances to come to some kind of rational equilibrium, where both sides benefit equally.
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Over the last years, European refining has been in the spotlight for several closures among its refineries. It is now the case of Petroplus to be at stake. Petroplus was the largest independent oil refiner in Europe, but the company is shutting out 3 of its refineries because of financial problems. In particular, in France, its Petit-Couronne refinery is now the symbol of deindustrialization in Europe and politicians have taken on the subject to rescue employments. Is it really the end of refining like other industries in Europe?

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