Germany Drops Opposition To Russia Oil Embargo

The Wall Street Journal has reported that Germany has dropped opposition to an EU wide plan to ban the importation of Russian crude oil.

• The move has been made possible by an agreement with Poland to supply the German Schwedt refinery. It is understood that Germany's opposition to the measure will be removed on the condition Germany is allowed enough time to source alternative supplies of crude.
• Poland's role in facilitating the German position is illustrative of Warsaw's hawkishness on Russian energy and Reuters has reported in the last few minutes: 'Poland says countries paying for Russian gas in rubles should be penalised.'
• The US and the EU are seeking natural gas alternatives after Moscow blocked gas exports to Poland and Bulgaria.
• Wires reported yesterday that a number of EU states, reportedly Germany, Austria, and Slovakia, were wavering on the Russian demand to transact in rubles but the German acquiescence to the oil ban may signal a more unified EU response to the gas standoff.
• The UK initiated a similar plan to phase out oil by the end of the year which may act as a template for the EU.
• WTI has moved 2% higher on the news although it is as yet unclear the timeframe for implementation of a Russian oil ban.