Despite recent declines in oil prices, they still remain at incredibly high levels around the world, which has driven up spending on oil for all nations. Europe is set to pay a record amount on oil this year according to IEA executive director Maria Van der Hoeven.
The EU is on track to spend more than half a trillion dollars on imported oil in 2012. Between 2000 and 2010 the continent spent an average of $182 billion on oil, last year that figure grew to $488 billion due to high oil prices, but as the prices have continued to grow it is predicted that they will spend more than $500 billion this year.
Poor economic growth throughout Europe has also led the countries using the Euro to feel the high prices of oil even more due to the fact that the Euro has fallen in value against the dollar.
Van der Hoeven believes that in order to encourage confidence in the markets, nations should remove oil subsidies in order to build confidence that the markets are "freer and less distorted, while also lowering demand growth for fuels and energy service."
Increased spending on renewable energy in order to reduce demand on fossil fuels will also help Europe's current situation she said. "To the extent that this is achieved through improved energy efficiency, or through the increased reliance on non-fossil forms of energy, these efforts would not only support economic growth but also broader environmental goals."
By. Joao Peixe of Oilprice.com
Joao is a writer for Oilprice.com More