The German government has taken control of the German subsidiary of the Russian oil giant Rosneft. The action was announced by the Federal Ministry for Economic Affairs and Climate Action this Friday, with the green minister Robert Habeck at the helm in Berlin. The state has entrusted the company to the trustees of the Federal Network Agency, a move that places the subsidiary under ongoing state oversight.
The agency will not only oversee Rosneft Deutschland, but will also supervise all three refineries in which Germany holds an interest: Schwedt in the northeast, and MiRo and Bayernoil in the south. The plan outlines a six‑month period during which the Federal Network Agency can dismiss executive board members, appoint new leadership, and issue orders governing day‑to‑day operations.
With this measure, Berlin aims to ensure a stable fuel supply for the country. Data from the Ministry for Economic Affairs indicates that Rosneft Deutschland accounts for about 12% of Germany’s total crude processing capacity. The ministry’s press release stated that the trusteeship removes risks to energy security and builds a foundation for protecting the Schwedt refinery’s future. German authorities have been careful to avoid further interruptions to the subsidiary amid current energy market tensions.
three refineries
The Schwedt refinery, located near the Polish border, stands as the most strategic asset among Rosneft Deutschland’s three refineries. Historically, Russia supplied oil to Central Europe via the Druschba pipeline, a route whose name means friendship in Russian. The pipeline dates back to 1964 and was celebrated as a symbol of cooperation between the Soviet era and Central Europe.
The Ministry of Economic Affairs emphasizes that the failure of Schwedt and its downstream products would threaten energy provisioning in the northeast of Germany, underscoring the sector’s sensitivity to regional supply chains.
The government’s objective is to quickly identify alternatives to Russian crude and reduce dependency. The EU embargo on Russian oil, enacted in response to the invasion of Ukraine, took effect in early 2023, signaling a broad move away from Russian crude. This shift remains a central pillar of Europe’s energy diversification strategy.
Possible price increase
Foreign Minister Olaf Scholz cautioned that Russia is no longer a reliable partner during remarks on Friday. In a joint appearance with Robert Habeck, the chancellor and vice chancellor also announced a nearly one‑billion‑euro public aid package for East Germany. The plan seeks to safeguard energy infrastructure in the eastern regions and prevent potential job losses that could surpass a thousand workers. This measure signals a broader governmental commitment to stabilizing regional energy markets during the transition away from Russian supplies.
The intervention in Rosneft Deutschland, combined with the phased reduction of Russian crude, is expected to exert upward pressure on fuel prices in Germany. Presently, diesel hovers around two euros per liter, while Super E10 sits near 1.80 euros per liter. The energy price surge remains a key driver of inflation, which hovered around the high single digits last year and is projected to stay elevated as supply adjustments continue. Analysts anticipate inflation could move into double digits later this year or early next year, reflecting the broader macroeconomic recalibration in response to energy costs.