Germany shows when to stop buying Russian coal and oil

Germany will end Russian coal purchases on August 1st and ban Russian oil purchases on December 31st, as the country seeks to end its energy dependence on Russia following Moscow's decision to invade Ukraine.

Russia has previously supplied 40 percent of Germany's coal and 40 percent of its oil, Deputy Finance Minister Joerg Kukies said on July 13th at the Sydney Energy Forum, organised by the Australian government and the International Energy Agency.

“Whoever knows the history of the Druzba oil pipeline, which was already a tool of the Soviet Empire over Eastern Europe, to rid yourself of this addiction is not a trivial issue, but one that we will achieve within a few months”, Kukies said.

He added that the main challenge ahead will be the fulfillment of the massive vacuum that will remain in gas supplies after Germany and the entire European Union give up Russian supplies, which now total 158 billion cubic metres annually.

Germany is moving rapidly to develop liquid natural gas import terminals (LNG) to help alleviate the gas supply gap.

Kukies said the United States and Qatar could jointly supply about 30 bcm of LNG-shaped gas to Europe, but that a large gap will still remain.

“We can't hope this problem can be removed”, he said.

Meanwhile, the United States and its allies of the 7th (G7) Group are working on new measures to reduce Russia's ability to finance its fight in Ukraine, while at the same time seeking to lower the price of oil and gasoline because growth at such levels could hit the global economy, setting a limit on the price of Russian oil purchases.

US Treasury Secretary Janet Yellen is visiting Indo-Peacekeeping countries to lobby for the proposal. In Tokyo on July 12th, Yelen and Japanese Finance Minister Suzuki Shunichi said the two countries have agreed to explore “the probability of price restrictions where it is appropriate”.

The G7 proposal is to connect financial services, insurance and transport oil loads to a price ceiling. A sender or importer may have access to these services only if he commits himself to a maximum price set for Russian oil. / REL