Oil industry prepares for oil embargo
The EU has presented another - the sixth - package of sanctions aimed at Russia. The most important component - in addition to the exclusion of Russia's largest bank, Sberbank, from the international banking system Swift, a ban on broadcasting by three Russian state broadcasters, and sanctions against individuals such as the head of the Russian Orthodox Church Patriarch Kirill - is an oil embargo. "We are now proposing an embargo on Russian oil. This involves a complete ban on imports of all Russian oil," EU Commission President Ursula von der Leyen told the European Parliament on Wednesday. According to the plans, imports of Russian crude oil will only be allowed for six months, while mineral oil products will be banned until the end of the year. Exceptions were granted to Hungary and Slovakia: As both countries are more dependent on Russian oil, they are to be given longer to set up alternative supply routes.
The petroleum industry in Germany is working with the Federal Ministry of Economics to organize a substitute for Russian crude oil. According to the industry association en2x, there are signs that the Leuna refinery site will continue to operate via a pipeline from the seaport of Gdansk, but not to the same extent as before. At the PCK refinery in Schwedt, which is supplied with Russian crude oil directly via the Druzhba pipeline, part of the previous crude oil volumes are to be supplied via a pipeline from the Rostock seaport in the future. "Whether this is sufficient for permanent operation is currently being examined," said en2X CEO Christian Küchen. A conversion of the PCK refinery to partial-load operation probably cannot be realized without friction losses. According to Küchen, there would be a shortage of petroleum products in the supply region, which would have to be replaced by transports within Germany and imports from abroad.
To bridge a shortfall of Russian crude oil due to an embargo, crude oil and products held by the Petroleum Stockholding Association (EBBV) could also be used. If a transition succeeds in terms of crude oil imports, adjusted logistics and continued operation of the two eastern German refineries Leuna and PCK at least in partial load, which is assumed, Küchen said, the nationwide supply of gas stations including eastern Germany could be maintained. "However, this will place considerable demands on the logistics capabilities of inland waterways, rail and road," en2x CEO Küchen is convinced.
Eastern Germany can only be supplied with petroleum products such as gasoline and heating oil from western Germany via tank cars, by road or inland waterway vessels. To supply the two refinery sites from the west, crude oil would have to be transported by sea to Rostock or Gdansk, from where it would be forwarded via crude oil pipelines. EBV volumes from Lower Saxony could be delivered to Rostock or Gdansk via Wilhelmshaven by tanker.
However, the refineries in eastern Germany have so far been designed to process Russian oil grades. According to en2x, the permanent use of other types of crude oil would require adjustments to the plant technology. This would lead to high investments and could not be implemented during ongoing operations.
