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Oil price: What does the German import ban mean for Russian pipeline crude oil since the beginning of the year?


Since the beginning of the year, Germany has also refrained from Russian oil deliveries via pipeline. What does this mean for supply and oil prices? The most important questions and answers at a glance.

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Delivery stop:

Since the beginning of the year, the refineries in Schwedt and Leuna have no longer received crude oil from Russia via the Druzhba pipeline.

Kazakhstan should deliver instead.

Photo: Patrick Pleul/dpa

At the beginning of the year, Germany stopped all crude oil imports from Russia.

The reason is the Russian war of aggression against Ukraine.

An EU embargo against Russian oil arriving by tanker has been in effect since December 5th.

Deliveries via the Druzhba pipeline have now also been abandoned.

Germany and Poland had agreed at EU level to refrain from using Druzhba oil.

There are exceptions for other countries.

The East German refineries in Schwedt in Brandenburg and Leuna in Saxony-Anhalt therefore have to change their sources of supply.

Despite international sanctions, the price of oil has recently fallen.


The most important questions and answers at a glance.

What does this mean for Germany's oil supply?

Of the approximately 15 oil refineries in Germany, two cannot produce at full capacity because of the embargo: PCK Schwedt and the Mitteldeutsche Raffinerie Leuna.

The Russian oil has not yet been completely replaced in the two East German refineries.

Until recently, both were particularly dependent on Russian crude oil.

Because the Druzhba pipeline had been their main supply line since the early 1960s.

Now the refinery in Brandenburg, which employs around 1,200 people and until recently belonged to the Russian oil company Rosneft, is said to be working with tanker oil.

This comes partly via the port of Rostock, partly via the Polish port of Gdansk.

In addition, Kazakhstan is to supply crude oil.

The Mitteldeutsche Raffinerie in Saxony-Anhalt, which employs around 600 people, also relies on deliveries via Gdansk.

Both refineries are expecting lower utilization than before for the time being.

The contractually guaranteed oil quantities are not yet sufficient, the central German refinery Leuna recently explained.

For PCK in Schwedt, a capacity utilization of initially 70 percent is assumed - a level that is necessary for the refinery to be able to produce at all.

PCK boss

Ralf Schairer

spoke of "amounts for the minimum capacity utilization of the refinery" in January.

With regard to concerns about security of supply in Brandenburg, Schairer added: "I am sure that we can operate the refinery and supply the region with fuel and heat."

PCK supplies 90 percent of Berlin and Brandenburg with petrol, kerosene, diesel and heating oil.

According to the operator TotalEnergies, the Leuna refinery largely covers the petrol needs of Saxony-Anhalt, Saxony and Thuringia.

The federal government and the state of Brandenburg consider the supply to be secure despite the embargo.

How safe are the replacement deliveries from Kazakhstan?

Although Germany wants to do without Russian oil, this will hardly be possible without Russia's infrastructure.

Kazakhstan is ready to supply oil to Germany.

In order to be able to transport oil to Europe, the country in Central Asia has to fall back on the Russian pipeline infrastructure or bring the raw material by sea via the Caspian Sea to Azerbaijan, where it can be pumped via pipelines to Turkey or the Black Sea coast of Georgia can.

Magsum Mirsagaliev

, head of state-owned oil and gas company Kazmunaygas, said his company was ready to send test shipments to Germany via the Druzhba pipeline to the PCK refinery in Schwedt from January.

The Kazakh pipeline company Kaztransoil has already submitted an application for the transit of 1.2 million tons of oil to Germany in 2023.

According to the Russian leadership, Russia is ready to allow the Druzhba to be used to transport Kazakh oil to Germany.

It remains questionable whether Russia will withdraw the permit at some point.

What other oil sanctions has the EU imposed on Russia?

In addition to the crude oil embargo for sea transport, the EU also wants to stop purchasing processed oil such as diesel or kerosene from Russia from February.

The oil embargo is intended to make it more difficult for Russian President

Vladimir Putin

(70) to finance the war against Ukraine.

In addition, the EU wants to enforce a price cap for oil that Russia supplies to third countries such as India or China.

In return, Moscow bans the sale of oil to countries that have decided on the price cap, effective February 1.

The embargo policy is controversial.

Critics consider them ineffective.

Why has the price of oil fallen recently?

Despite the oil sanctions, oil prices have fallen in recent weeks.

At the end of 2022, a barrel (159 litres) of North Sea Brent cost US$ 82.02.

That was $20 less than in August.

Market observers pointed to a comparatively low trading volume on the oil market shortly before the end of the year and a generally gloomy mood on the financial markets.

In addition, the increase in corona infections in China is dampening optimism for better economic development and the associated greater demand for crude oil, according to market observers.

The price cap in the EU and G7 countries also triggered uncertainties on the market with regard to future oil demand.

Should we fill up heating oil tanks now?

Some market observers are expecting further price increases on the oil markets, as some of the oil sanctions are not yet in effect.

After all, from February the EU will no longer purchase heating oil or diesel from Russia.

According to experts, a supply crisis for diesel is imminent.

This could also have consequences for heating oil prices, because diesel and heating oil are almost identical in production.

dri with dpa-afxp

Source: spiegel

All news articles on 2023-01-04

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