Germany shrugs off Russia's oil export ban but warns high gas prices to last 'until 2024'
Germany on Wednesday shrugged off Russia's ban on oil sales to countries and companies that comply with a price cap agreed by Western allies, saying it has "no practical significance".
"I would not like to say that it's irrelevant but it has no practical significance," said an economy ministry spokeswoman, adding that Germany has been preparing since early summer to do without Russian oil.
Berlin has been working to ensure security of supply which "continues to be assured regardless of whether this decree has been issued or not".
Germany had been highly reliant on Russian energy but has been forced to wean itself off crude, coal and gas from the power giant after Moscow invaded Ukraine on February 24th.
The price ceiling of $60 per barrel agreed by the European Union, G7 and Australia came into force in early December and seeks to restrict Russia's revenue while making sure Moscow keeps supplying the global market.
Introduced alongside an EU embargo on seaborne deliveries of Russian crude oil, the cap aims to ensure Russia cannot bypass the embargo by selling its oil to third countries at high prices.
'Another year' of high energy prices
On Wednesday Economy Minister Robert Habeck of the Greens said that people in Germany would have to reckon with high gas prices for another year.
"When will the prices come down? I hope that it will be better by the end of 2023, although not at the level of 2021," said Habeck. "For 2023, we will still have to endure higher prices."
At that point, the infrastructure will "probably be developed to such an extent" that sufficient substitutes for the missing Russian gas will flow to Germany and prices will regulate themselves again.
Germany's attempts to save gas were thrown off course after Russia drastically reduced its deliveries via the Nord Stream 1 pipeline over summer and stopped deliveries entirely in September.
Since then, it has raced to find alternative sources of energy. New terminals for importing liquefied natural gas (LNG), for example, are expected to help. In December, Germany opened its LNG terminal in the North Sea port of Wilhelmshaven.
READ ALSO: Germany cuts the ribbon on first LNG terninal
Prices already sinking
The price of gas on Europe's wholesale markets has been fallen in recent weeks. However, this has not yet had an impact on household gas bills, as many suppliers have locked consumers into long-term contracts.
Nevertheless, Habeck sees the slight dip as a positive development. "Prices have fallen since the summer, which is amazing, since we are in the middle of winter," said Habeck.
For example, he said, the price of gas on the so-called spot market fell from €130 to just under €100 per megawatt hour before Christmas.
"That is clearly too high, no question about it," he said, adding that the price was still at a lower-than-feared level.
In 2023, the German government is also offering relief to households to help them cope with rising heating and energy costs.
Most notably, December's gas bill will be covered by the state and a gas price cap is set to come into force in March and apply retrospectively from January.
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"I would not like to say that it's irrelevant but it has no practical significance," said an economy ministry spokeswoman, adding that Germany has been preparing since early summer to do without Russian oil.
Berlin has been working to ensure security of supply which "continues to be assured regardless of whether this decree has been issued or not".
Germany had been highly reliant on Russian energy but has been forced to wean itself off crude, coal and gas from the power giant after Moscow invaded Ukraine on February 24th.
The price ceiling of $60 per barrel agreed by the European Union, G7 and Australia came into force in early December and seeks to restrict Russia's revenue while making sure Moscow keeps supplying the global market.
Introduced alongside an EU embargo on seaborne deliveries of Russian crude oil, the cap aims to ensure Russia cannot bypass the embargo by selling its oil to third countries at high prices.
'Another year' of high energy prices
On Wednesday Economy Minister Robert Habeck of the Greens said that people in Germany would have to reckon with high gas prices for another year.
"When will the prices come down? I hope that it will be better by the end of 2023, although not at the level of 2021," said Habeck. "For 2023, we will still have to endure higher prices."
At that point, the infrastructure will "probably be developed to such an extent" that sufficient substitutes for the missing Russian gas will flow to Germany and prices will regulate themselves again.
Germany's attempts to save gas were thrown off course after Russia drastically reduced its deliveries via the Nord Stream 1 pipeline over summer and stopped deliveries entirely in September.
Since then, it has raced to find alternative sources of energy. New terminals for importing liquefied natural gas (LNG), for example, are expected to help. In December, Germany opened its LNG terminal in the North Sea port of Wilhelmshaven.
READ ALSO: Germany cuts the ribbon on first LNG terninal
Prices already sinking
The price of gas on Europe's wholesale markets has been fallen in recent weeks. However, this has not yet had an impact on household gas bills, as many suppliers have locked consumers into long-term contracts.
Nevertheless, Habeck sees the slight dip as a positive development. "Prices have fallen since the summer, which is amazing, since we are in the middle of winter," said Habeck.
For example, he said, the price of gas on the so-called spot market fell from €130 to just under €100 per megawatt hour before Christmas.
"That is clearly too high, no question about it," he said, adding that the price was still at a lower-than-feared level.
In 2023, the German government is also offering relief to households to help them cope with rising heating and energy costs.
Most notably, December's gas bill will be covered by the state and a gas price cap is set to come into force in March and apply retrospectively from January.
READ ALSO:
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