Germany Seizes 3 Russian Oil Refineries

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In an effort to prevent potential economic harm from the European Union's embargo on Russian oil, the German government has taken control of three oil refineries that are already operating in Germany and are owned by the Russian oil giant Rosneft. On January 1st, the embargo is scheduled to take effect.

Three refineries will be placed under temporary trusteeship as per the terms of a legislation amendment made last month, while expropriation may still be used as a last resort.

One of the refineries, PCK in the town of Schwedt, lies directly on the Druzhba (Friendship) pipeline, a 2,500-mile-long pipeline that, in January, delivered roughly 750,000 barrels of crude oil per day to the European Union. Rosneft makes up about 12% of Germany's capacity for oil refining.

Due to the EU embargo, the continent will need to switch from oil delivered by pipeline to oil supplied by tankers. Ports in Gdansk, Poland, and Rostock, Germany, according to IHS Markit, could deliver around 740,000 barrels per day.

About 25% of Poland, Germany, Czechia, Hungary, and Slovakia's daily crude oil needs are met by the Druzhba pipeline network. Pipeline networks on the Adriatic Sea could be expanded in addition to deliveries through the ports of Gdansk and Rostock.

If the barrels may be carried by tanker, the Adria crude oil pipeline system, which originates at the Omisalj terminal in Croatia, has a capacity of 480,000 barrels. Refineries in Croatia, Serbia, Hungary, and Slovakia would be supported by that sum.

About 930,000 barrels per day are transported via the Transalpine pipeline system from a terminal in Trieste to refineries in Hungary, Austria, and Bavaria. Redirecting tankers from the Middle East delivering spot market barrels to Asia and obtaining extra crude from West Africa are the issues at hand.

According to Reuters, Rosneft Deutschland owns 54% of the Schwedt refinery and Shell has a 37.5% share that the corporation has been attempting to sell for some time. The Federal Network Agency, which is now in charge of Rosneft Deutschland, has declared that Rosneft no longer has the right to provide orders.

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