Embargo against Russia: is there enough oil?

Status: 01/10/2023 12:37 p.m

Since the beginning of the year, no Russian oil has flowed to Germany – with consequences above all for the east German refineries. It will be a while before the Schwedt location in particular is fully utilized again.

By Hans-Joachim Vieweger, ARD Capital Studio

Energy prices have fallen significantly since the beginning of the year. This is currently relaxing the markets; also in East Germany, which until now has been heavily dependent on Russian oil. Now the large refineries in Leuna in Saxony-Anhalt and Schwedt in Brandenburg are mainly supplied with oil via the Baltic Sea port of Rostock.

So far only about 50 percent occupancy

The work in the refineries is going well, says Michael Kellner, Parliamentary State Secretary in the Federal Ministry of Economics: “The security of supply in our country, in East Germany, is given. What we promised that Schwedt would continue to produce, that Leuna would continue to produce: that’s happening right now.”

The large refinery in Schwedt is initially only about 50 percent utilized – that is the lower limit of capacity, according to company circles; if there were further delivery cuts or the winter got colder, all operations might have to be stopped. However, the Green politician, Kellner, promises that capacity utilization should be increased to at least 70 percent by the end of January.

The opposition still has many questions

Opposition politicians remain skeptical. The CDU MP Jens Köppen speaks of a “bad manoeuvring” by the federal government. Uncertainty wears employees down. Christian Görke, member of the Bundestag for the Left Party and former Finance Minister in Brandenburg, also complains that many questions from the members of the Bundestag’s Energy and Climate Committee have only been answered evasively.

“Nothing has been clarified,” criticizes Görke. “The federal government is hiding behind the private interests of the shareholders of the PCK refinery, even though this company is under trusteeship.” In this respect, the statements by the federal government were not exhaustive: “There is no clarity as to how a minimum capacity of 70 percent and beyond is now secured.”

Fees to Russia for oil from Kazakhstan

On the one hand, it is crucial for the further oil supply that oil is also delivered to Schwedt via the port of Danzig in Poland. In addition, the refineries in the east are to be supplied with oil from the former Soviet Republic of Kazakhstan. According to the Ministry of Economics, the contract negotiations with the Central Asian country are on the right track.

Kazakh oil would, of course, flow west through the Druzhba pipeline. Which in turn would bring revenue to Russia. “Yes, it would be line fees – which the Kazakh side would have to pay to Russia, by the way. That would be a fraction of what they pay for a barrel of crude oil,” says Kellner.

Rosneft’s lawsuit as imponderability

The prerequisite, however, is that Russia does not block the transit of Kazakh oil. And there is a second imponderability in the case of Schwedt: The Russian majority owner Rosneft has filed a lawsuit against the de facto disempowerment in the form of a federal trusteeship.

The oral hearing before the Federal Administrative Court could be scheduled for February or March. State Secretary Waiter says that the trustee administration has proven itself and should be continued.

Leuna and Schwedt: Is there enough oil?

Hans-Joachim Vieweger, ARD Berlin, 10.1.2023 11:42 a.m

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