Germany to Cease Purchasing Russian Oil in 2023

The German government has denied allegations that it intends to purchase Russian oil in the beginning of 2021, instead opting to import crude oil from Kazakhstan.

Previously, Europe's largest economy had declared that it would cease importing Russian crude by the end of 2021 due to the Kremlin's invasion of Ukraine, however, this was put into question when the CEO of Russia's oil pipeline operator reported that requests for Russian crude had been made for the first quarter of 2023.

Leuna and Schwedt, two German refineries, have traditionally relied heavily on Russian oil imports that were delivered through the Druzhba pipeline, the largest crude oil conduit in Europe. However, an agreement is in the works to switch the source of the oil to Kazakhstan, though it has yet to be finalized.

A spokesperson for the economy ministry has denied reports that Germany had requested Russian crude oil. They have stated that the mineral oil companies at the Leuna and Schwedt refineries will not be ordering Russian crude oil in the upcoming year.

As of January, the PCK refinery in Schwedt has set aside space in its pipeline system for oil from Kazakhstan.

The European Union's ban on most seaborne imports, which began on December 5th, does not apply to pipeline oil coming from Russia. Germany and Poland, which receive Russian crude through the northern leg of the Druzhba link, have promised to be completely independent of it by the end of the year.

Transneft's CEO Nikolay Tokarev revealed in an interview with Rossiya 24 on Tuesday that, despite their announcement to not accept oil from Russia starting January 1, they have received requests from Polish consumers for 3 million tons for the upcoming year and 360,000 tons for December. Additionally, Germany has also sent a request for the first quarter.

Tokarev stated that it would be challenging for German refineries to substitute all of the Russian volumes with Kazakh crude. He also mentioned that, while it is technically feasible to carry out swap operations to partially substitute Russian oil, it is a political decision to make.

Last week, the Kazakh Foreign Minister Mukhtar Tileuberdi stated that the Central Asian nation could transport up to five million tons of material annually through a pipeline.

PKN Orlen SA, Poland's refiner, declared last month that the Polish request to Transneft was a customary process and was only to reserve potential transit capacity. The company is prepared to discontinue imports of Russian oil, but it requires government decisions to make that happen.

In November, Orlen announced that they had filed a technical request with the Russian operator in the event that the existing contracts were still being honored.