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Oil Prices Sink As Germany Takes A Stance Against Ban On Russian Crude

One day after we reported that Germany had warned against a ban on energy imports from Russia, quoting Germany's Economy Minister Robert Habeck who said "I would not advocate an embargo on Russian imports of fossil fuels. I would even oppose it," adding that "we need these energy supplies to maintain the price stability and energy security in Germany," and warning that "a shortage in supply could threaten social cohesion in Germany", moments ago Bloomberg reported that Germany now openly opposes the push to stop Russian oil, gas imports.

“I’m not ruling out anything for the further development of this year,” German Finance Minister Christian Lindner tells reporters in Berlin when asked about the next steps against Russia. “At the current time, however, there is no new decision to be made.”  

“The government insists that we do not take the initiative to end our imports of oil, gas and coal to Germany”

“This option is of course on the table, but at the moment it doesn’t seem advisable to take this step ourselves in order to ensure the sustainability of the sanctions against Vladimir Putin” and that “we don’t hand long-term strategic advantages to Mr. Putin. We must recognize that accepting negative economic effects is also our contribution to solidarity with Ukraine”

Germany's Chancellor Scholz echoed the view, saying that Europe has deliberately exempted energy supplies from Russia sanctions as, at the moment, Europe's supply of energy cannot be secured in any other way.

The German position may explain why late on Sunday Bloomberg reported that the Biden administration is now considering whether to prohibit Russian oil imports into the U.S. without the participation of allies in Europe, which is likely aimed at isolating Germany's blocking position. 

And while the administration has yet to decide on a U.S. import ban "with the timing and scope of any move still fluid" buyer of Russian oil are already largely boycotting Russian energy, having self-imposed restrictions on purchases of Russian seaborne Brent which failed to find any buyers until it was offered at a $28.50 discount to dated Brent, when Shell emerged as a buyer only to issue a statement on Saturday explaining why it did so following global condemnation and vowing to donate all profits.

Meanwhile, the news that Germany is blocking a comprehensive Western embargo - coupled with some favorable news out of Libya which said that it was resuming oil production at its biggest oil field, Sharara, to the tune of 270-300bkpd - have helped push oil sharply lower from its overnight session highs of $139, with WTI trading at $119.1, up around $3.44 on the session, after being $15 higher earlier.

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By Zerohedge.com

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