There is a better way. Instead of allowing market panic to dictate distribution and pricing, policymakers should pursue multilateral coordination to defend a price ceiling in global oil markets and allocate scarce resources in a way that meets people’s essential needs and minimises the economic fallout. Put simply, the world needs an oil buyers’ club.
The European Union should take the lead. Accounting for 23% of global crude oil imports, the EU28 alone have substantial buying power. They demonstrated as much during the last crisis, when they imposed a European emergency gas price cap. But this time the shortfall is larger, and oil is more fungible globally, so it would be important for other net importers to join. More participants will make for a more powerful mechanism.
The EU should first and foremost aim to bring in other high-income countries that are major refiners of imported oil — notably Japan, South Korea and Singapore. Since low- and middle-income countries have few means to outbid their high-income counterparts in global oil markets, they have every incentive to participate.
If China — the world’s largest oil importer, accounting for 23% of the total — also decided to join, the importers’ club would have the market cornered. In 2023 (the latest year for which the International Energy Agency provides complete global data), net importers purchased slightly more than 80% of globally traded crude oil. This means that, together, net importers could effectively act as a monopsony — like a monopoly, but on the demand side. All net importers of crude oil would immediately benefit from lower prices.
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EU-China coordination would also send a powerful geopolitical message, demonstrating the EU’s ability to conduct an independent foreign policy. If China had not joined, the EU would have had a rare opportunity to take the lead in forming a meaningful global alliance that includes Global South countries — no small feat for a bloc that has been struggling to find its place amid intensifying superpower competition.
The buyers’ club should cap oil prices for physical delivery at a level that remains very attractive to exporters — say, US$100 per barrel. (For comparison, Sri Lanka recently paid US$286 per barrel of oil delivered, and European buyers are now paying US$150 per barrel of North Sea crude.) As for allocation, because low-income countries account for only 0.1% of global imports, they should be allowed to maintain their pre-war import levels. All other countries would reduce their imports by the same share: if about 25% of global exports are missing, a 25% reduction in pre-war imports should be agreed.
Refiners in the club would be prohibited from making windfall profits. They would instead be required to sell onward to domestic buyers and other club members at margins prevailing in non-war times, thereby preserving the capped price for refined products such as diesel and liquefied petroleum gas. It is important that club members commit to maintaining pre-war levels of refined-product exports. The alternative — acquiring oil at low cost through everyone’s participation while keeping a larger share for themselves — would cause the club to break down. The buyers’ club could be extended to refined oil products imported from outside its members.
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Countries with positive net exports of crude oil could also be enticed to join the club, further strengthening it. For starters, crude exporters that import substantial volumes of refined oil products, such as Angola and Ecuador, might want to secure the lower price afforded to club members. More broadly, exporters might want to anchor domestic oil prices to the club price, thereby preventing higher domestic fuel prices from hurting local consumers. If the buyers’ club also introduces a price floor — say, US$65 per barrel — oil exporters who join would enjoy more stability in the future. The floors could be written into long-term supply contracts.
The buyers’ club would protect livelihoods, limit inflation, and help contain recessionary pressures. It would also deliver fiscal savings, which could be invested in the swift expansion of low-cost, low-carbon alternatives. Renewable-energy deployment and electrification should be accelerated. Public transportation should be made free. Domestic energy-saving schemes, which ensure the fair allocation of scarce resources, should be democratically legitimised and designed to guarantee basic needs and the viability of industrial systems.
The buyers’ club does not create the shortages; they are there anyway. The club is a mechanism for spreading costs more equitably, building solidarity among importers, and preventing costly bidding wars while the emergency lasts.
Amid a crisis of multilateralism, an oil buyers’ club might seem utopian. But the idea is not new. A similar scheme for allocating raw materials was implemented for allied countries during World War I. A multilateral oil buyers’ club is precisely the kind of bold initiative that countries need to weather the current crisis — and that the world needs to strengthen preparedness for future shocks.
For the EU, leading an initiative built on distributional fairness would amount to more than good economic policy. As the world order crumbles, the bloc’s position as a global power that stands for peace and cooperation would be strengthened. — Project Syndicate, 2026
Isabella M Weber, an associate professor of economics at the University of Massachusetts Amherst, is also a climate policy fellow at the Roosevelt Institute.
Gregor Semieniuk is an associate professor of public policy and economics at the University of Massachusetts Amherst
