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Brussels — The European Commission wants price reporting agencies and market players to consider euro-denominated price benchmarks for crude oil, EU climate action and energy commissioner Miguel Arias Canete said Wednesday.

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Targeted consultations starting next year will gather feedback on the need to set up a euro-denominated crude oil price benchmark to be referenced in contracts, Canete told reporters as he presented an EC recommendation to increase energy trading in euros.

"We will invite stakeholders to express their views on the market potential for a broader use of euro-denominated transactions for crude oil, refined products and gas," he said.

The EU spends around Eur300 billion/year ($340 billion) on average on energy imports, and around 85% of this is paid in US dollars, despite energy imports from the US being only 2% of the total, Canete said.

Most of the EU's energy imports come from Russia, Norway, the Middle East and Africa.

This US dollar dominance, combined with "recent unilateral actions by third countries" -- a reference to the US decision to reimpose sanctions on Iran -- can make energy trade more difficult, Canete said.

The EC plans to consult national governments, central oil stock holding entities, energy market players, price reporting agencies, commodity exchanges, and European companies providing financial services on how to use more euros in energy trading.

It also plans to consult separately on using the euro more in contracts for metals and minerals, for agri-food commodities, and for transport manufacturing.

It plans to report on the results of these consultations next summer, with the next steps to be decided afterwards.

The EC's recommendation has no legal force and EU officials stressed that market players retain their free choice as to which currencies they use.

EU officials said the EC was not expecting major dollar-denominated crude benchmarks would switch to euros, but wanted to explore the potential for new euro benchmarks, or for paying in euros for contracts linked to a dollar benchmark.

Other options include requiring Central Stockholding Entities set up by national governments to comply with EU oil stocks rules, plus related obligated companies, to use euros more often when buying and selling emergency oil stocks.

-- Siobhan Hall, siobhan.hall@spglobal.com

-- Edited by Maurice Geller, newsdesk@spglobal.com