德國

Germany has the power to kick its Russian O&G habit

Block BRICS and chill
Rui Soares is an investment professional for FAM Frankfurt Asset Management, an independent investment firm.

The Russian energy problem for the European Union and Germany was never oil.

Russia accounts for approximately 10 per cent of the worldwide oil production: 10.5mn barrels per day, of which 5mn are exported to the EU. A full EU oil embargo would not take the 5mn barrels out of the market, since these can be easily re-routed to China, which imports 9mn out of the 14mn barrels per day it consumes. Instead, the 5mn barrels a day from the Middle East currently sold to China could be re-routed to the EU. We know because this is already happening.

There are powerful economic incentives for China to keep switching from Middle Eastern to Russian oil: pre-Ukraine invasion, Russian oil (Urals) used to trade in line with Brent crude. Demand for Russian oil in international markets dropped as a result of western sanctions, including self-sanctioning by many companies, leading to a current discount of 20-25 per cent to Brent.

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