Topline
Germany will stop importing Russian oil and will gradually halt natural gas imports, German Foreign Minister Annalena Baerbock said Wednesday, the strongest promise yet from Germany to cut itself off from the Russian energy it strongly relies on and has been reluctant to ban.
Key Facts
Baerbock told reporters Germany is “completely phasing out Russian energy imports” and plans to stop Russian oil imports by the end of 2022, according to a translation of her comments provided by Reuters.
Russia accounted for about 55% of Germany’s natural gas imports and 35% of Germany’s oil imports last year, causing Germany to resist a blanket European Union ban on Russian energy.
Baerbock said an embargo on Russian natural gas “will follow” the oil ban, and German officials have previously suggested a mid-2024 target date for an end to Russian gas imports.
Germany’s heavy reliance on Russian natural gas may be partially offset by a deal reached with Qatar in March to supply liquefied natural gas to Germany, along with increased gas and oil imports from existing partners, but experts have warned Germany may face significantly elevated prices without Russian energy.
Key Background
German Chancellor Olaf Scholz has long spoken out against Russian energy embargoes, warning such a ban could trigger a European recession. Scholz has since softened its stance on a ban, suggesting earlier this month all Russian oil imports may be phased out by year end. The EU proposed to end Russian coal imports to the bloc earlier this month, its first energy ban of any sorts against the Kremlin. Much of Europe’s natural gas comes from the Nord Stream natural gas pipelines running from Russia to Germany, though Scholz stopped the approval of the $11 billion Nord Stream 2 pipeline in February in response to Russian aggression in Ukraine.
What To Watch For
If the EU announces a ban on Russian oil. European officials are discussing initial plans for an embargo, according to Reuters and the New York Times, and Germany’s willingness to support a ban may streamline the process. Any embargo would likely be gradual, though JPMorgan warned Tuesday a complete and immediate ban would cause Brent crude oil prices to jump 65% to $185 a barrel.
Further Reading
Germany will end oil imports from Russia by year end, says minister (Reuters)
How reliant is the world on Russia for oil and gas? (BBC)
Why Germany Can’t Just Pull the Plug on Russian Energy (New York Times)
