Greenpeace Analysis: Oil Embargo Would Be Effective and Manageable

An oil embargo against Russia would be feasible and bearable for Germany - this is the result of a new study by oil industry expert Steffen Bukold commissioned by the environmental NGO Greenpeace. The head of the research office Energycomment considers the consequences for the Federal Republic and the global market to be manageable, but painful for Russia. Without a rapid EU embargo, currently blocked mainly by Germany, Austria, and Hungary, Germany's oil payments to Russia could rise to up to 14 billion euros this year, the highest value since 2014.

"An oil embargo would be effective. It would hit the Russian budget," states the energy expert.

Recently, 45 percent of the oil exported by Russia has flowed into the EU, and the Russian state siphons off a large part of the profits as taxes, Bukold outlines according to a report by the Süddeutsche Zeitung. Bukold believes that the war machinery cannot be stopped immediately.

"But Moscow's financial leeway will be significantly restricted in the medium term," Bukold believes.

He does not expect that Putin's regime in Asia would find buyers for the corresponding volumes. China would have to cancel orders from the Persian Gulf and would put itself in a "critical dependency on Russia". Bukold concludes from prices that Russia is already having trouble selling its oil, which is significantly cheaper than North Sea oil since companies are avoiding Russian oil. According to analysts, production in Russia fell by eight percent in the first weeks of April compared to March. 

"With an immediate oil embargo, the federal government and Chancellor Scholz can significantly support Ukraine," says Greenpeace spokesperson Marion Tiemann.

The refineries would manage

The energy expert also considers the consequences for German refineries to be manageable. The challenge is more in logistics than in replacing the quantities. Instead of the Russian pipeline to Schwedt and Leuna, more tanker oil could land via Rostock and Gdańsk and existing pipelines. This would replace 60 percent, and the rest could be closed with five tank trains per day, according to Bukold's analysis. If necessary, state oil reserves would also be available. Contrary to warnings from figures such as Federal Foreign Minister Annalena Baerbock or US Treasury Secretary Janet Yellen that an immediate embargo could drive global prices, Bukold contends that the oil market is currently "unexpectedly relaxed". Reasons include reduced air traffic due to the lockdown in China and the impacts of disrupted supply chains on the European economy. In Bukold's forecast, the price increase would remain manageable if the oil market is well monitored.

"Once oil sanctions are decided, market participants know where they stand, and the adjustment of global supply flows can take place," the paper concludes.

Energy saving would be the first step: FDP resists speed limit

More important, according to Greenpeace, is to reduce oil consumption. At the beginning of April, the NGO calculated that with a speed limit of 100 on highways and 80 on country roads, Germany would have paid 170 million euros less for energy imports to the aggressor Russia in the 43 days following the start of the war, according to calculations. Politicians from the FDP, in particular, have so far and continue to oppose speed limits.

"Germany's cash flow to the Kremlin would be reduced by millions, making an oil embargo easier if the FDP abandons its ideological resistance to a speed limit. Slowing down the speed generally, at least for the duration of this terrible war, is a simple step to reduce dependence on oil imports. After the horrific images from Bucha, steps like a speed limit are a reasonable act of solidarity with the people of Ukraine," appeals Greenpeace traffic expert Benjamin Stephan.

To prevent oil millions from flowing into Putin's war chest every day, the NGO is calling for an immediate halt to Russian oil imports. To facilitate this, Greenpeace recently proposed ten immediate measures that could reduce Germany's total oil consumption by 10 to 12 percent right away. These include a speed limit, car-free Sundays, extended home office regulations, and a stop to domestic flights. Had these measures been introduced at the start of the war, payments for Russian oil imports could have been reduced by a good 830 million euros by early April. Limiting the speed to a maximum of 100 kilometers per hour on highways saves two million tons of diesel and gasoline in the first year alone. This corresponds to around four percent of Germany's total fuel consumption. According to a representative survey by the polling institute Civey on behalf of the Tagesspiegel, a majority of those surveyed (53 percent) consider a speed limit to be a good measure to reduce dependence on Russian oil and energy supplies.

"We are disappointed that the FDP continues to block the speed limit and that the Greens are not fighting harder for it," Greenpeace transport policy expert Marion Tiemann told the SZ.