Ukraine war: oil and gas embargo against Russia?

Warnings of risks and side effects

Created: 2022-03-20 05:59

By: Marcus Giebel

Obtains gas from Russia via pipeline: The chemical park in Leuna, Saxony-Anhalt, would be severely affected by an embargo.

© Jan Woitas/dpa

The calls for a German oil and gas embargo against Russia are getting louder.

But what consequences would this step have for the economy and the population?

Munich - No more oil from Russia.

No more gas from Russia.

These are sentences that can easily be used to score points in view of the Ukraine war.

Because the daily view of the dead and the destruction that has been to be lamented since the invasion began almost a month ago, is literally pushing Germany* out of its dependence on Vladimir Putin*.

It's hard to bear that the Kremlin boss is constantly receiving huge sums of money because of the non-stop imports of Russian oil and gas.

This cycle could only be ended by an energy embargo*, as the USA* have already decided and Great Britain* is planning.

But how realistic would such a drastic step be?

And what are the consequences?

Ukraine War: Germany gets a third of its oil and half of its gas from Russia

Russia* is by far the most important oil and gas supplier for Germany.

Germany gets a good third of its crude oil from there, and more than half for gas.

These figures alone give an idea of ​​how immense the effect of an import ban on these raw materials from the war-torn country would be.

Therefore, Oliver Zander warns against imposing an energy embargo*, which according to the latest surveys is popular, because, according to the general manager of the industry association Gesamtmetall, this would result in "process heat no longer being available for industry and the manufacturing sector".

He fears: "We would have production stops in many areas within a very short time."

Putin's war in Ukraine: IG Metall warns of "immediate embargo on gas, hard coal and oil"

In the

, Jörg Hofmann, chairman of IG Metall, also raised a warning finger: "An immediate embargo on gas, hard coal and oil would be counterproductive and would damage the economy and consumers in Germany much more than Russia."

Now it is not surprising that the industry immediately went on high alert.

Especially since, according to an EU* regulation, even in an emergency, which means an "extraordinarily high demand for gas, a significant disruption in the gas supply or another significant deterioration in the supply situation", the supply of "protected customers" - i.e. private individuals - is to be ensured.

Even if “additional non-market-based measures have to be taken for this”.

This means that if the demand for gas cannot be met, companies would first have to step back.

Traveling: Economics Minister Robert Habeck is looking for new oil and gas suppliers for Germany.

© Bernd Von Jutrczenka/dpa

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War in Ukraine – Economics Grimm warns: “We have to be prepared for significantly higher gas prices”

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The rising electricity prices have alarmed the federal government.

Now there are indications that electricity customers will be relieved earlier, at least in the case of the EEG surcharge.

That's not enough for the industry.

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War in Ukraine: Embargo against Russia would hit East Germany in particular

, the consequences of an embargo would be particularly severe

in eastern Germany.

The PCK refinery based in Brandenburg and the refinery Mitteldeutschland based in Saxony-Anhalt, which also supply most of the petrol, diesel or heating oil for Berlin, Saxony and Thuringia, receive the crude oil from Russia via the Druzhba pipeline.

If the raw material were imported from a region other than the Urals, the plants would have to be converted due to the different properties of the oil, emphasizes Andreas Goldthau from the Institute for Transformative Sustainability Research in Potsdam in the report.

This would take several months and incur costs that would have a major impact on the long-term profitability of the refineries.

Russia and Ukraine at war: changing transport routes would take time

Other transport routes would also result in lower output, the Fuels & Energy trade association (en2x) complained in the same report.

On the other hand, Germany could apparently give up Russian import oil, which is delivered via other routes - although a changeover here would also take "some time".

An unspecified mineral oil trader predicts “gross restrictions” for East Germany in the event of such sanctions against Russia.

In addition to driving bans on Sundays, he also fears paralyzed branches of industry.

Another problem: The Russian company Rosneft is the largest mineral oil processor in this country and owns large shares in various refineries - in addition to PCK also Miro in Karlsruhe or Bayernoil.

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Putin's Ukraine War: Switching to alternative energies would probably take five years

The

quotes the Berlin think tank “Agora Energiewende”, according to which dependency can be reduced through green energy, more efficient buildings and alternative technologies.

But according to the calculations, this would take until 2027.

Meanwhile, Lower Saxony's Energy Minister Olaf Lies expressed "very serious doubts about the usefulness of such an embargo"

in an interview with the

The SPD politician points out that such a decision would lead to “the price spiral turning even faster”.

Lower Saxony's CDU leader and Economics Minister Bernd Althusmann has already mentioned support for the economy if the volume of gas supplied is reduced: "Protection is now needed for those companies whose business activities have been severely restricted by the Ukraine war.

This could also include compensation for damage caused or direct aid.”

War in Ukraine: According to Habeck, the gas supply is not completely secured for the coming winter

Liquefied natural gas (LNG) is repeatedly brought into play as a short-term alternative.

Its largest exporters include the United Arab Emirates, which Economics Minister and Vice Chancellor Robert Habeck is heading to this weekend after his visit to Qatar to sound out the possibility of deliveries.

The former head of the Greens pointed out on

that the gas supply for the coming winter is not yet completely secured: "That means if we don't get more gas for next winter and the supply connections from Russia would be cut or tear off, we would have we don't have enough gas to keep all the houses warm and all the industries running.”

Russia and thus Putin still have Germany firmly in their hands.

Habeck now calls the dependency on just one supplier “simply stupid”.