Wednesday, May 18

Germany Says Ready to Halt Russian Oil After EU Agrees Embargo

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(Bloomberg) — Germany threw its weight behind a European Commission proposal to impose a phased-in import ban on Russian oil to punish Moscow for its decision to invade Ukraine.

The transition period is sufficient to arrange alternatives, Economy Minister Robert Habeck told reporters on Wednesday following a two-day cabinet retreat in Meseberg near Berlin. He added that disruptions could still be possible as Germany switched away from Russian supplies.

“The transition period is sufficiently long that we can take all precautions to create alternatives to Russian oil in Germany,” Habeck said. “Of course we can’t guarantee in this situation that it will not falter, especially regionally.”

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He said the main challenge is a refinery in Schwedt near the Polish borders, which is operated by Russia’s Rosneft PJSC and has little incentive to switch suppliers. Germany is preparing legislation that could pave the way for it taking control of the facility.

“This conglomerate must be dissolved politically,” he said. “The aim of the federal government is that the location should be retained, that we want to build a viable industry there, so that the embargo on Russian oil doesn’t lead to the lights going out in the region.”

The EU is proposing to phase in a ban on Russian crude over the next six months and halt imports of refined fuels by the end of the year, part of a sixth round of sanctions to increase pressure on Russian President Vladimir Putin. Officials from the EU’s 27 member states will meet later on Wednesday to discuss — and potentially approve — the plan.

Amid the turmoil in gas and power markets, Germany is considering how to respond to windfall profits from energy companies, but Finance Minister Christian Lindner said that the government should steer clear of taxing “excess profits” to not sap resources for investing in renewable power.

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