The import ban on Russian oil and, from 2023, on Russian diesel means that the industry is quickly filling up its fuel stores. It remains unclear how things will continue – motorists will have to tremble again in the new year.
The good news first: Germany’s dependence on “Russian oil” has decreased significantly since the outbreak of the Ukraine war. According to the Federal Office of Economics and Export Control (BAFA), only around 23 percent of the oil came from Russia in the summer. The EU will ban imports of crude oil from Russia from December 5 and from February 5, 2023 also of refined products such as diesel.
“In August 2022, a total of 7,070,224 tons of crude oil were imported to Germany. Crude oil imports from Russia amount to 1,673,582 tons. This results in a share of Russian crude oil in total imports of 23.67 percent in August 2022,” according to BAFA. According to information from FOCUS Online, the proportion was currently only 16 percent in October – after around 30 percent in October 2021.
However, Germany needs gigantic amounts of the crude oil product diesel every day, and the import volume has hardly been reduced, especially in eastern Germany. Diesel is required for car and truck traffic, to a lesser extent also for rail and ship traffic and other purposes such as power generation. In 2021, gross domestic sales of diesel amounted to 35.21 million tons in Germany. This corresponds to around 115 million liters of diesel per day, of which around 55 million are for cars. It is unclear whether and how enough replacements can be obtained from other countries.
Because even if enough replacement oil can be procured from other regions such as the USA, India and the Middle East, the question arises as to whether there is also sufficient capacity for fuel production. Industry insiders consider the problem to be grossly underestimated compared to the attention the gas crisis is getting.
Because although there are many alternative sources of supply for oil, Germany and the EU do not have large capacities to refine sufficient quantities of diesel from the available crude oil. “This circumstance is the same in all affected EU countries and finished diesel must be bought,” said an industry insider to FOCUS Online. He also points out that the further operation of the important PCK refinery in Schwedt (Uckermark) has not yet been clarified. So far, the Russian oil has been refined there.
As reported by RBB, the Federal Ministry of Economics is in talks with Kazakhstan and Poland as possible replacement suppliers for Schwedt. The refinery requires enormous amounts of oil to even make it worthwhile to operate. Energy expert Thomas Grube from Forschungszentrum Jülich told Business Insider: “It is unclear what lower limit should be set for crude oil processing, below which it is no longer possible to operate the refinery. If the deliveries from Rostock and Gdansk were below this limit, continued operation of the refinery would be in danger.” If that were the case, one would have to reckon with at least regional bottlenecks in the fuel supply.
In any case, the fuel dealers are still quickly filling up their stocks. “From November 1st to 12th, loads of Russian diesel for the warehouses in the Amsterdam-Rotterdam-Antwerp (ARA) region, through which Germany also purchases oil products, increased to 215,000 barrels per day, said an expert from the Energy analysis company Vortexa, Pamela Munger”, reports the Swiss “Handelzeitung”.
The International Energy Agency IEA speaks of “tough competition” that will now exist for every barrel of non-Russian diesel. Overall, after the bans came into force, the EU would have to replace around one million barrels of crude oil per day, plus 1.1 million tons of oil products. Diesel prices, already 70 percent higher than a year ago, would therefore continue to rise. February 2023 at the latest will show whether 2022, the most expensive tank year of all time, will be topped again.
One way of breaking free from Russian dependency would be synthetic fuels such as e-fuels or “HVO diesel” made from residual materials. In principle, up to 7 percent of the required diesel could be replaced by HVO in the short term, and even 20 to 30 percent in the medium term. At least that’s what insiders from the mineral oil industry assume. However, the German federal government sees alternative fuels as competition for the politically enforced electric mobility – and is therefore on the eco-fuel brake.
Andreas Deul from GF Wirtz Energie
The Fuels and Energy trade association also points out the legal problems: “It is not possible to replace fossil diesel with more biodiesel in the short term, as its offsetting of the greenhouse gas reduction quota is limited by law. In addition, the Federal Ministry for the Environment even wants to lower the credit limits for conventional biofuel, which is counterproductive for both continued supply and climate protection,” the association told FOCUS Online.
It’s difficult to say how hard the oil sanctions will hit Russia. For example, Russian oil exports to China and India have increased significantly since the EU embargoes.
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