Germany Threatens Immediate Embargo On Russian Oil

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by Tyler Durden
Monday, May 02, 2022 - 01:50 PM

With Emmanuel Macron back secure in his second term, and the latest conflict over gas supplies between Moscow, Poland and Bulgaria sending shudders through the European community, the Germans - newly emboldened by a deal to access LNG terminals belonging to its European neighbors as it scrambles to build more of its own - are once again threatening to cut off Russian oil and gas by the end of the summer.

The latest comments come via German newspaper Welt and Finance Minister Christian Lindner, who said an immediate Russian oil embargo is a distinct possibility.

Not only is Berlin open to discussing the boycott of Russian energy, but he insisted that such an outcome would be viable.

German support for an oil embargo would mark a major turnaround from earlier this year, when Europe's biggest economy (which remains heavily dependent on Russian energy, as we have repeatedly shown) had dragged its feet.

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Lindner's comments follow similar remarks from German Foreign Minister Annalena Baerbock, who said last night that Berlin was ready to support a gradual, EU-wide embargo on Russian oil imports. FT writes that Germany would still need at least a few months to prepare itself, assuming agreement to a "phased-in ban" akin to what was done with coal:

Germany has called for a phased-in ban on Russian oil imports into the EU, stepping up pressure on Brussels to find a deal between divided member states ahead of a crunch week for the bloc’s policy on Russian energy.

Jörg Kukies, one of chancellor Olaf Scholz’s closest advisers, said Berlin was in favor of an oil embargo, but needed a “few months” to prepare for an end to Russian crude shipments. Germany had previously said it would need until the end of the year.

While the EU has already agreed to stop importing Russian coal, countries that border Ukraine or Russia, including Poland and the Baltic States, have been calling for an oil ban as well. Economy and Climate Minister Robert Habeck said Sunday that he expects Germany could be fully independent of Russian crude oil imports by the end of summer.

But meanwhile, Newsquawk cautions in a note: "Newsflow has been heavily focused on a potential Russian oil/gas embargo, with Hungary remaining heavily opposed; however, Politico reports of a potential compromise for such member nations."

Oil prices were tumbling Monday morning, although prices bounced on the headlines hinting at an embargo. The comments come as EU members are laying the groundwork for yet another package of economic sanctions targeting Russia. Ukraine's foreign minister, Dmytro Kuleba, told the EU's top diplomat over the weekend that the bloc's next round of sanctions against Moscow must include an oil embargo.