Finland could use stockpiles to reduce Saudi oil impact

Finland could resort to its emergency reserve of oil products to absorb the oil price impact resulting from the attacks against oil production installations in Saudi Arabia, national broadcaster Yle reported on Sunday.

Finland has a legally mandated reserve stockpile of fuels. However, its possible usage depends on whether the International Energy Agency (IEA) gives a recommendation or an actual decision, media reported.

Asko Harjula, the acting CEO of the national emergency supplies center, told Yle that Finland has used the emergency oil supplies only once during the last 30 years. It was in 2005 when the Catrina storm destroyed oil production facilities in the U.S.

"Even then it was only a recommendation of the IEA, not an actual decision," Harjula said, adding that activation of an official system would be a serious situation.

"In the event that IEA gives an official request to use backup supplies, the Finnish government would process the matter, and the additional fuel would be available in couple of weeks," Harjula said.

The direct impact on oil prices in Finland is diminished through the fairly heavy taxation of oil products in the country.

The consumer prices of oil products in Finland are higher than in many other countries. Timo Huhtisaari, a director at a leading wholesale supplier of oil products, told Yle that although pricing in Finland is based on the world market price, the impact of taxation on domestic retail prices is essential.

Lauri Karna, an expert at the major Finnish oil company Neste, said on Sunday the impact of the attacks in Saudi Arabia is comparable to that of the war in Libya 10 years ago.

He said on Yle that the decline in the Middle East will have the "widest repercussion in Asia," where the consumption of Persian Gulf oil is the largest proportionately.