The German government has taken control of three oil refineries operating in Germany and owned by Russian oil giant Rosneft in an effort to forestall potential damage to its economy from the European Union’s embargo on Russian oil. The embargo is set to go into effect on January 1.
Under terms of a law amended last month, three refineries will be placed under temporary trusteeship but could be expropriated as a last resort. Rosneft accounts for about 12% of Germany’s oil refining capacity and one of the refineries, PCK in the town of Schwedt, is located right on the Druzhba (Friendship) pipeline, a 2,500-mile-long pipeline that, in January, transported about 750,000 barrels of crude oil per day to the European Union.
The EU embargo means that the continent will have to replace the pipeline oil with oil supplied by tankers. IHS Markit estimated that ports in Gdansk, Poland, and Rostock, Germany, could deliver about 740,000 barrels a day.
The Druzhba pipeline network supplies Poland, Germany, Czechia, Hungary and Slovakia with about 25% of the countries’ daily demand for crude oil. In addition to deliveries through the ports of Gdansk and Rostock, pipeline systems on the Adriatic Sea could ramp up.
The Adria crude oil pipeline system, starting at the Omisalj terminal in Croatia, can transport 480,000 barrels, if the barrels can be transported by tanker. That amount would support refineries in Croatia, Serbia, Hungary and Slovakia.
24/7 Wall St.The Transalpine pipeline system carries about 930,000 barrels a day from a terminal in Trieste to refineries in Hungary, Austria and Bavaria. The problems to be solved here are redirecting tankers from the Middle East carrying spot market barrels to Asia and getting more crude from West Africa. Both can be mostly solved with cash.
Rosneft Deutschland owns a 54% stake in the Schwedt refinery and Shell owns 37.5%, a stake the company has been trying to sell for some time, according to Reuters. Rosneft Deutschland is being placed under the trusteeship of the Federal Network Agency, which has said that Rosneft no longer has authority to issue instructions.
Is Your Money Earning the Best Possible Rate? (Sponsor)
Let’s face it: If your money is just sitting in a checking account, you’re losing value every single day. With most checking accounts offering little to no interest, the cash you worked so hard to save is gradually being eroded by inflation.
However, by moving that money into a high-yield savings account, you can put your cash to work, growing steadily with little to no effort on your part. In just a few clicks, you can set up a high-yield savings account and start earning interest immediately.
There are plenty of reputable banks and online platforms that offer competitive rates, and many of them come with zero fees and no minimum balance requirements. Click here to see if you’re earning the best possible rate on your money!
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
