Germany will support an EU oil embargo on Russia

Speaking to CNN’s Julia Chatterley on Monday, Finance Minister Christian Lindner said Germany would agree to new sanctions against Russia with its European Union partners.

“Germany is ready for further sanctions, including an oil embargo,” he said.

The European Union has already agreed to phase out Russian coal imports as part of a fifth wave of sanctions imposed on Russia following its invasion of Ukraine.
But the bloc has found it much harder to reach consensus on joining a US embargo on Russian oil despite weeks of talks. Hungary reiterated its opposition to an oil embargo on Monday, Reuters reported.

Lindner said he did not want to speculate on whether certain EU member states, such as Hungary, should have exemptions or exclusions from an oil embargo.

“I can assure you that Germany is ready to reduce its oil imports, we know that others are studying this issue carefully,” he added.

Last year, Russia accounted for around 27% of EU oil imports. It also supplied about 40% of Europe’s natural gas. EU leaders have already pledged to cut Russian gas imports by 66% this year and completely break the bloc’s dependency by 2027.

“We prepared to be less dependent on Russian energy imports,” Lindner said. “We can reduce imports, starting with coal, then oil. It will take longer to be independent of Russian natural gas imports, but we will continue so that in the end we will be completely independent of Russia.”

Moscow upped the stakes in a tense energy standoff with Europe last week by cutting off natural gas supplies to Poland and Bulgaria. State gas giant Gazprom said neither country had agreed to President Vladimir Putin’s demand that customers from “hostile” countries should open two accounts at Gazprombank – one in euros and the second in rubles, from which payments for gas would be made.

The vast majority of Gazprom’s contracts with its European customers provide for payment in euros or dollars. The Kremlin’s ultimatum for ruble payments is widely seen as a move to bolster its war chest and boost the Russian currency.

Is Germany next?

German gas distributor Uniper said last week it would continue to pay for its Russian supplies in euros, but added it believed a “sanctions law-compliant payment conversion” was possible. He said he was looking into the matter carefully in close coordination with the German government.

Lindner said he expected German utilities to honor the terms of their contracts, which require payment in euros or dollars.

Soaring costs and shortages push German industry to the brink

“Germany cannot be blackmailed, we know that there is a dependency on natural gas from Russia, it is a reality. We need time to reduce this dependency,” he said. told CNN. “This is the contract situation and we are not changing because Putin needs rubles for his war chest.”

Germany has reduced its consumption of Russian gas to 35% of imports from 55% before the war in Ukraine, but says it must continue buying from Moscow at least until next year to avoid a deep recession.

Uniper said it could not do without Russian gas in the short term.

“It would have dramatic consequences for our economy,” he said in his statement.

Germany’s central bank said last week that an abrupt shutdown would plunge the economy into a deep recession. According to an analysis by five of the country’s leading economic institutes, around 550,000 jobs and 6.5% of annual economic output could be lost this year and next.


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