Germany: Government no Longer Opposes Russian Oil Embargo
Germany's Economic Minister Robert Habeck says Germany has reduced its reliance on Russian oil from 35% before the Russia-Ukraine war to 12%. Deals like the one with Gdansk will reduce that figure even further.
What Happened: Germany has dropped its opposition to a Russian oil embargo as long as it has enough time to wind down imports and find alternatives, The Wall Street Journal reported April 28. On April 27, Germany's economic minister announced that the country had struck a deal with Poland to increase oil imports through the Polish port of Gdansk, which is equipped to handle supertankers and has a pipeline that can send crude oil to a German refinery in Schwedt on the German-Polish border.
Why It Matters: As Germany softens its position on a ban, it will become more likely that Hungary remains a holdout. EU officials are still debating whether to implement an embargo, a price ceiling or tariffs on Russian crude oil, and The Wall Street Journal reported that an announcement on new oil sanctions could come as early as next week. Germany has worked to reduce its Russian oil imports, but several of its refineries are still tied to infrastructure that is designed to handle Russian crude oil imports instead of seaborne crude oil imports.
The Schwedt refinery, for example, can import some crude oil from the German Rostock oil terminal, but the Rostock terminal is not equipped to handle supertankers, and the capacity of the pipeline connecting the terminal to the refinery is lower than the refinery's capacity. Nonetheless, Germany's Economic Minister Robert Habeck says Germany has reduced its reliance on Russian oil from 35% before the Russia-Ukraine war to 12%. Deals like the one with Gdansk will reduce that figure even further.
Background: TotalEnergies' Leuna refinery is the other main German refinery with limited alternatives, and that refinery receives Russian crude through the same pipeline infrastructure connected to Schwedt. TotalEnergies said in March that it would terminate all Russian supply contracts for the Leuna refinery by the end of 2022 once it reached deals with Poland to use Polish infrastructure to import crude.
Source: https://worldview.stratfor.com/situation-report/germany-government-no-l…