By Tyler Durden,
After throughout the whole month consistently rejecting a proposed European Union ban on Russian oil, but while also walking a delicate tightrope of opposing Putin's demand of payments in rubles for Russian energy, Germany is now ready to pull the trigger on an embargo.
It's another major Berlin U-turn happening in tandem with the decision to send heavy weapons to Ukraine. The Wall Street Journal is citing Berlin government officials who say "Germany is now ready to stop buying Russian oil."
The WSJ underscores that this "clears the way" for a wider EU ban on Russian oil imports, given that Germany's resistance was the chief holdout to imposing an embargo before this point.
Further the report indicates that an embargo now seen as "imminent" but it remains that no target date has been set yet, or at least hasn't been disclosed publicly. While events earlier in the week made clear that this was coming, preparing markets, oil began surging on the news...
Which is not good news for President Biden as gas prices at the pump are already on the rise...
Germany appears to have lifted its objection based on prior negotiations to implement a phased-in Russian oil embargo, similar to the phased approach regarding the coal ban.
Additionally, other countries particularly in eastern Europe have lately appeared willing to step up in taking the pressure off Germany supply - for example Poland says it's ready to supply a German refinery via Gdansk which is owned by Rosneft.
"Should Rosneft refuse to process non-Russian oil imports, Germany could put the refinery under state management under laws protecting strategic assets," the report says. But the elephant in the room is that some eastern European countries are actually close to 100% reliant on Russian oil, or with many approaching total dependency.
According to recent figures in The Hill "European nations, which in November 2021 imported about seven times as much Russian oil as the United States, are far more reliant on Russian oil imports and some Eastern European countries are almost entirely dependent on Russian oil." This is broken down as follows according to European regions...
- Lithuania, for example, gets 83 percent of its oil imports from Russia, followed by Finland (80 percent), Slovakia (74 percent), Poland (58 percent), Hungary (43 percent) and Estonia (34 percent).
- Germany follows at 30 percent, joined by Norway (25 percent), Belgium (23 percent), Turkey (21 percent), Denmark (15 percent) and Spain (11 percent).
However, to be frank, these grandiose anti-Russian-oil statements are all bullshit PR since, as we detailed yesterday, Germany has already caved into President Putin’s demand to pay for Russian gas via a murky system that converts funds paid in euros to roubles.
As The Times reported, Robert Habeck, the German energy minister, said that the euro-to-rouble swaps had been given the legal green light by the European Commission and were compatible with sanctions and existing contracts with the Russian energy giant Gazprom.
The problem, of course, is that the facts of German dependence on Russian energy supply does not fit the unified-coalition-against-Putin narrative.
Source : https://www.zerohedge.com/markets/eu-embargo-russian-oil-imminent-germany-drops-opposition