Germany will end purchases of Russian coal on August 1 and stop buying Russian oil on December 31, as the country looks to end its energy reliance on Russia following Moscow’s decision to invade Ukraine.
Russia previously supplied 40 percent of Germany's coal and 40 percent of its oil, Deputy Finance Minister Joerg Kukies on July 13 told the Sydney Energy Forum, hosted by the Australian government and the International Energy Agency.
"Anyone who knows the history of the Druzhba [oil] pipeline, which was already a tool of the Soviet empire over Eastern Europe, ridding yourself of that dependence is not a trivial matter, but it is one that we will achieve in a few months," Kukies said.
He added that the key challenge ahead will be to fill the massive gap that will be left in gas supplies after Germany and the entire European Union weans itself off Russian supplies, which now amount to 158 billion cubic meters (bcm) a year.
SEE ALSO: No Gold Future? Struggling Russian Far East Port May Lose Investment Project As Sanctions BiteGermany is moving fast to develop liquefied natural gas (LNG) import terminals to help ease the gas-supply gap.
Kukies said the United States and Qatar could together supply about 30 bcm of gas in LNG form to Europe but that a large gap will still remain.
"We can't just wish this problem away," Kukies said.
Meanwhile, the United States and its Group of Seven (G7) allies are working on new measures to starve Russia's ability to fund its war in Ukraine -- while at the same time looking to lower the price of oil and gasoline from soaring to levels that could hit the global economy -- by mandating a cap on the price of Russian oil purchases.
U.S. Treasury Secretary Janet Yellen is touring Indo-Pacific countries to lobby for the proposal. In Tokyo on July 12, Yellen and Japanese Finance Minister Suzuki Shunichi said the two countries have agreed to explore “the feasibility of price caps where appropriate.”
The G7 proposal aims to tie financial services, insurance, and the shipping of oil cargoes to a price ceiling. A shipper or importer could only have access to those services if they committed to a set maximum price for Russian oil.