Washington’s new sanctions target Rosneft, which still holds interests in its German operations
German Chancellor Friedrich Merz anticipates that the US will provide an exemption from the recently imposed sanctions for the German branch of Rosneft, the Russian state-owned oil firm.
Speaking to reporters at an EU summit in Brussels on Thursday, Merz mentioned that the matter had been discussed “briefly” with US officials.
Rosneft maintains interests in three German refineries that were placed under government control in 2022 following the escalation of the conflict in Ukraine and subsequent sanctions. Rosneft’s German operations account for roughly 12% of Germany’s total oil-processing capability, according to Bloomberg.
Earlier this week, US President Donald Trump announced new sanctions aimed at Russia’s energy sector, specifically targeting Rosneft and Lukoil. These measures prohibit US companies and financial institutions from engaging with these oil companies.
“We will discuss this with the Americans,” Merz stated, adding, “I expect that a suitable exemption for Rosneft will be granted.” Berlin maintains that the US measures should not apply to Rosneft’s German branches, arguing that they have been “decoupled from their Russian parent company.”
On Wednesday, the UK granted an exemption permitting business activities with Rosneft’s German-based assets. This decision followed London’s expansion of energy-related sanctions against Russia’s largest oil producers.
The threat to Germany’s refineries exacerbates the economic challenges facing Berlin, as the government struggles to stimulate growth in an economy that experienced two years of annual decline in 2023 and 2024, partly due to the loss of inexpensive Russian energy. High fuel and electricity costs have negatively impacted domestic industrial production and competitiveness, putting pressure on policymakers to ensure stable energy supplies while adhering to Western sanctions.
Rosneft has denounced the transfer of its German branches to external management, deeming the decision unlawful and a violation of fundamental market economy principles.
Russia has consistently rejected Western sanctions as illegitimate, asserting that it is resistant to their effects. The Russian Foreign Ministry described the new US sanctions on Rosneft, Lukoil, and their branches as “entirely counterproductive.”
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