US Sanctions Pressure Sparks Urgent Decisions on Rosneft Germany’s Future

Since the start of Russia's invasion of Ukraine, Germany has managed the country’s Rosneft subsidiaries under a trust administration meant as a temporary solution. Despite ongoing government efforts since 2022 to sell these stakes and reduce dependency on Russian energy, no sale has succeeded. This stalemate is now under heightened pressure due to the US imposing new sanctions targeting Russian entities, with firms severing ties to businesses over 50% Russian-owned by November 21. However, the US has indicated a willingness to exempt Rosneft Germany temporarily if ownership issues are resolved within six months, reflecting recognition of the subsidiary's full separation from its Russian parent. Rosneft Germany operates three critical refineries, including the PCK Schwedt refinery processing 11.5 million tons of crude annually, constituting roughly 12% of Germany’s oil refining capacity and playing a crucial role in northern Germany’s fuel supply. Chancellor Friedrich Merz is reportedly engaging with Washington to secure this exemption and protect energy security. German politicians like energy policy spokesperson Elke-Anette Schmidt argue for transferring the refineries to permanent public ownership to avert supply disruptions. Although there have been calls for nationalization or expropriation of Rosneft Germany, the government has dismissed these over fears of Russian retaliation. The trust administration has been extended biannually since the war began, but with rising urgency due to sanctions deadlines and failed sales efforts, the future of these assets and their critical role in Germany’s energy landscape remain uncertain. Federal Minister of Economics Katherina Reiche has reassured that Rosneft Germany is not directly affected by the sanctions because of its legal separation from the Russian parent company. Nevertheless, the political debate continues amid concerns that international sanctions could imperil the PCK refinery and broader energy supply for northern and eastern Germany, underscoring the complex balance between sanction enforcement and national energy interests.