European Union foreign ministers were discussing plans for closer relations with Latin American and Caribbean countries on Monday as the bloc prepares for a major shift in its energy supply lines because of the war in Ukraine.
The talks in Brussels are a sign of major geopolitical shifts underway after the bloc agreed in June to impose sanctions on Russia, including a 90% cut on its oil imports by the end of the year.
The EU’s moves to upgrade its ties with the region was a recognition that oil supply growth in the next few years will come from the Americas and the Middle East, said analysts. They included increasing supply from big oil producers such as Brazil and up-and-coming Guyana.
The likely supply shifts will mean longer voyages and better rates for tankers, said Richard Matthews, a director at Gibson Shipbrokers. “Regardless of this meeting, it’s already a trend we expect to see to replace lost Russian crude,” he said.
Gibson earlier this month said that global seaborne flows will be “completely redefined” for tankers when the European oil embargo on Russia comes into effect. Fearnley Securities said on Monday it was bullish for the sector in the long-term with tanker demand likely to rise as the sanctions are imposed.
The world had radically changed in the last year with a “huge geopolitical shift” that meant the EU had to reach out to the rest of the world, said a senior EU official.
“The basic point of discussion for ministers will be how we can better improve our relationship with Latin America and the Caribbean in the current conditions,” said the official.
The EU’s foreign affairs council will also discuss upcoming talks with the Arab League. US President Joe Biden visited the region last week to try to encourage Saudi Arabia to pump more oil as economies grapple with the prospect of a major economic downturn.
