EurOil: Germany unveils plan to phase out Russian energy

Germany is looking to halve its imports of Russian oil by the middle of this year and make its refining sector “almost independent” from Moscow by the end of 2022, the country’s economy minister, Robert Habeck, announced on March 28.

Berlin has radically changed its energy policy in the wake of Russia’s invasion of Ukraine that started on February 24. Once fairly comfortable with its significant dependence on Russian energy, it now has plans to phase out energy trade with Moscow as soon as it can.

Russian imports account for 35% of the oil that was refined in Germany, according to an energy security report released by the government on March 28. But dependence could be reduced to about 25% “in the coming weeks,” if expiring contracts are not renewed, the report said. Alternative supplies can be sourced to cover the shortfall, the report stated.

Russia’s Rosneft has a 12-month contract to deliver 47,000-83,000 barrels per day of crude to France’s TotalEnergies via the Druzhba pipeline to the 210,000 bpd Leuna refinery, but this is due to expire this month. TotalEnergies has already said it will end its oil trade with Russia as soon as it can, and “by the end of 2022 at the latest.” Russian oil imports at Leuna will be halved by mid-April, according to the German government’s plan.

However, the report stressed that phasing out Russian oil would not be an easy undertaking. The alternative supply that is found must be of a similar quality, not just at Leuna but also the 226,000 bpd Schwedt refinery, which accounts for a third of Russian oil imports to Germany.

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