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Germany issues an oil shortage warning following the EU’s embargo on Russian imports

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Another indication of the damage Europe’s energy crisis is wreaking on the continent’s greatest economy is Germany’s warning of local oil shortages when the EU-wide embargo on Russian oil takes effect in January. The caution came as part of a response to a query from opposition Christian Democrat MPs regarding energy security in eastern Germany, which is home to two big refineries that rely heavily on Russian petroleum. Schwedt is one of these companies, and it serves as a major provider of gasoline, diesel, kerosene, and heating oil to major local consumers like Berlin International Airport. The administration responded by outlining its plans to wean Schwedt off of Russian oil imports, but it also acknowledged that the ban may hurt the east German economy.

The ministers’ response was, “It’s possible that there could be some short-term disruptions in supply and price rises in certain areas.” She likened these bottlenecks to those in southern Germany during the summer, when high temperatures led to a dramatic drop in water levels on the Rhine, halting shipping and increasing transit costs on Europe’s most important commerce canal. The European Union’s (EU) sanctions on Russian oil shipments at sea, which will take effect on December 5th, are an important aspect of the bloc’s effort to deny Russian President Vladimir Putin of billions of dollars in money to fuel his war against Ukraine. Since they are completely reliant on Russian oil, Hungary, Slovakia, and the Czech Republic have secured temporary exemptions from the boycott. All three rely largely on the Russian-originated Druzhba pipeline.

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Although Schwedt and another eastern refinery, Leuna, are connected to Druzhba, Berlin has stated that it will fully execute the ban without exceptions by the end of this year. Poland said it will do the same thing. In addition, in September the government took Schwedt away from the Russian oil company Rosneft, which had owned it up until then. The government’s reaction to CDU lawmakers was that the impact of lower output at Schwedt and Leuna due to a disruption in Russian oil supplies was “difficult but manageable.” Schwedt is presently attempting to arrange a replacement supply via two separate pipelines, one from the German Baltic Sea port of Rostock and another from the Polish port of Gdansk. The government has stated that the Rostock-Schwedt pipeline “is and will be a key pillar of non-Russian crude oil supply” to the Schwedt refinery. Currently, it can deliver between 5 and 6.8 million tons of oil per year to Schwedt, but after some upgrades, that number should rise to close to 9 million. To fund the upgrade, the government pledged 400 million euros back in September.

Officials have stated that Schwedt can get the “minimal amount technically required” from the pipeline. But critics of the Russian oil embargo point out that in order for Schwedt to run at full capacity, it requires roughly 12 million tons of crude oil per year. Officials have confirmed that the Gdansk option is still on the table, as the first oil tanker to be supplied to Schwedt via Gdansk arrived at the refinery just last week. But the government’s response to the CDU dashed hopes that the Danzig-Schwedt pipeline would play a significant role in the refinery’s supply chain. Because it also supplies Leuna and Polish refineries, the line’s ability to pump oil to Schwedt is described as “restricted.” According to the document, “the government would welcome quantities of roughly 2-3 million tons per year through the Gdask pipeline given the current technical capacities, requirements, and possibilities for optimization.”

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