Germany to halve imports of Russian oil by summer

Germany has unveiled plans to halve its imports of Russian oil by the summer (beginning in June), as Western nations seek to cut off economic ties with Moscow as punishment for invading Ukraine.

Before the war began on February 24, a third of Germany’s oil imports, 45 percent of its coal purchases and 55 percent of gas imports came from Russia.

“In the past few weeks, we have undertaken intensive efforts with all the relevant actors to import fewer fossil fuels from Russia and broaden the basis of our supply,” Economy Minister Robert Habeck told reporters in Berlin as he laid out measures to boost energy independence for Europe’s biggest economy.

On top of the reduction in oil imports, Germany hopes to wean itself off Russian coal completely by the summer or autumn of this year.

On gas imports, however, Habeck underlined that it was more complicated, and Germany is expected to be able to largely wean itself off Russian deliveries only in mid-2024.

“The first important milestones have been reached to free us from the grip of Russian imports,” added Habeck, who this week agreed to deals on supplies of hydrogen and liquefied natural gas (LNG) with Gulf states.

His comments came as the United States and the European Union announced the creation of a task force aimed at curbing Europe’s dependence on Russian energy.

Under the agreement, the US will work with partners to ensure an additional 15 billion cubic metres of LNG for the EU in 2022. The European Commission will in turn work with EU member states to ensure demand of at least 50 billion cubic metres of US LNG a year, according to the White House.

‘Too early’ for an embargo

The invasion ordered by Russian President Vladimir Putin has prompted an overhaul of key planks of Germany’s energy, economic and security policy.

The German government has put the Nord Stream 2 pipeline project on ice, joined allies in imposing punishing sanctions on Russia and pledged a massive increase in defence spending while dropping a ban on arms exports to conflict zones in order to aid Ukraine.

However, it has resisted an outright halt to Russian energy imports, warning it would cause winter shortages to drive inflation and create potential instability.

Putin on Wednesday upped the ante by demanding payments for gas in roubles, something that Germany has said is a breach of contracts.

Habeck said it was “too early” for a full energy embargo, but added that “every contract that is halted hurts Putin”.

He was referring to companies with Russian suppliers which are letting their contracts run out and turn instead to other suppliers “at a crazy speed” amid increasing calls for an energy embargo.

As a result of the contract switches, oil deliveries from Russia can already be seen dropping by 25 percent, halving by the middle of the year and drying up completely by the end of the year. Likewise, energy companies were switching contracts to ditch Russian coal.

Der Spiegel magazine also quoted ministry sources on Friday as telling it that, “Despite the progress, an immediate embargo would still have too serious economic and social consequences.”

Ministry officials had “optioned” three floating LNG terminals, the magazine added.

“The German government is currently examining possible locations on the North Sea and Baltic Sea where these can be used in the short term – in some cases already for the winter of 2022/23,” it said, quoting from the memo.