This content is not available in your region

Germany could cope with Russian oil embargo by end of year, says minister

Access to the comments Comments
By Euronews  with AFP, Reuters
euronews_icons_loading
Tanks for producing bio gas are pictured at the harbor in Hamburg in April 2022
Tanks for producing bio gas are pictured at the harbor in Hamburg in April 2022   -   Copyright  Martin Meissner/Copyright 2022 The Associated Press. All rights reserved

Germany has said it would be able to cope if Russian oil supplies were cut off by an embargo or a decision by Moscow to switch off the taps.

Economy Minister Robert Habeck was speaking ahead of an emergency meeting of European Union energy ministers in Brussels on Monday.

The EU is edging towards a ban on imports of Russian oil by the end of the year, diplomats said, after talks between the Commission and EU countries at the weekend.

The bloc has also been striving for a united response to Moscow's demand that European buyers pay for Russian gas in roubles or face their supply being cut off. 

Many countries are heavily dependent on Moscow for energy needs and there are disagreements over how sanctions should be enforced. 

Habeck said that Russian oil now accounts for 12% of total imports, down from 35% before the war, and most of it goes to the Schwedt refinery near Berlin.

He acknowledged that losing those supplies could result in a “bumpy” situation for the capital and surrounding region, with price hikes and shortages, but that wouldn’t result in Germany “slipping into an oil crisis”.

He added that “other countries aren’t so far yet and I think that needs to be respected”.

Poland 'ready to help wean Germany off oil'

Poland's climate minister said on Monday that her country — which advocates tough measures against Russia — is ready to help Germany wean itself off Russian oil, Reuters reports.

"As Poland, we are ready to support Germany's ambitions of de-Russification with our refinery in Gdansk," Anna Moskwa said. "I hope that will be the last voice that will ... block these sanctions on oil."

Reuters also quotes two EU officials as saying the EU may spare Hungary and Slovakia from an embargo on buying Russian oil. 

Both countries are heavily dependent on Russian fossil fuels, and Hungary has repeatedly voiced its opposition to energy sanctions.

Drive to reduce gas dependence

Ministers on Monday were also expected to discuss the need to urgently secure non-Russian gas supplies and fill storage, as countries brace for supply shocks.

Russia halted gas supplies to Bulgaria and Poland last week after they refused to meet its demand to effectively pay in roubles.

Those countries already planned to stop using Russian gas this year and say they can cope with the stoppage, but it has raised fears that other EU countries, including Europe's gas-reliant economic powerhouse Germany, could be next.

It has also threatened to crack the EU's united front against Russia amid disagreement on the right course of action, as countries like Austria, Hungary, Italy and Slovakia all expressed reservations over the weekend about the possible embargo.

Immediate cutoff from Moscow gas could cause recession

With many European companies facing gas payment deadlines later this month, EU states have a pressing need to clarify whether companies can keep buying the fuel without breaching the EU's sanctions against Russia over its invasion of Ukraine.

Moscow has said foreign gas buyers must deposit euros or dollars into an account at the privately-owned Russian bank Gazprombank, which would convert them into roubles.

The European Commission has told countries that complying with Russia's scheme could breach EU sanctions, while also suggesting countries could make sanctions-compliant payments if they declare the payment complete once it has been made in euros and before its conversion into roubles.

After Bulgaria, Denmark, Greece, Poland, Slovakia and others last week urged clearer advice, Brussels is drafting extra guidance.

Russia on Friday said it saw no problem with its decree, which considers the buyer's obligation fulfilled only after the hard currency has been converted to roubles.

EU countries have paid more than €45 billion to Russia for gas and oil since it invaded Ukraine on 24 February, research organisation the Centre for Research on Energy and Clean Air found.

Russia supplies 40% of EU gas and 26% of its oil imports, a dependency that means Germany and others have so far resisted calls for an abrupt halt to Russian fuel imports for fear of economic damage.

Dependency on Russian gas varies between countries, but analysts have said an immediate total cut-off of Russian gas would plunge countries, including Germany, into recession and require emergency measures such as factory closures to cope.

Meanwhile, the bloc's top diplomats are expected to discuss the sixth package of EU sanctions against Moscow -- which is already being drafted by the Commission --- at a meeting on Wednesday.

And later this month, the Commission will unveil plans to end Europe's dependency on Russian fossil fuels by 2027, including expanding renewable energy and renovating buildings to consume less.