Germany Won’t Block a Russian Oil Embargo, Habeck Says

(Bloomberg) -- Germany signaled it wouldn't oppose a European Union embargo on Russian oil, but expressed skepticism that it's the most effective means of damaging Vladimir Putin.

Economy Minister Robert Habeck -- also vice chancellor in the ruling coalition in Berlin -- warned that halting Russian oil imports would cause serious pain to Europe's biggest economy, including supply shortages and “enormous price increases.”

“But we will no longer experience a national catastrophe,” he said late Thursday in an interview with ZDF television. “We have made a lot of progress on oil and could join an embargo if it happened. Germany is not standing in the way of it.”

Habeck said Tuesday that Germany has already cut its reliance on Russian oil enough to make a full embargo “manageable,” potentially laying the groundwork for a continent-wide ban that would upend the global trade in petroleum.

The share of Russian oil in Germany's imports has fallen to about 12%, from 35% before the invasion of Ukraine, Habeck said during a visit to Warsaw.

Habeck made clear in Thursday's interview that he's skeptical about an oil embargo, arguing that such a move might be “counterproductive” as it could allow Russia to supply other countries for an even higher price. Putin could also use oil to entice countries to support him, Habeck said.

“We have to stop the global oil price from rising in such as way that only Germany, western Europe, the U.S. and maybe Canada can afford it,” he added. “And then Putin would come along and say: you see what happens, the capitalist west is making you poor, I'll help you out and you can get a 20% discount from me. I just want you to be my ally.”

There are “other possibilities” that Western allies are discussing to damage Russia and try to bring the war to an end, Habeck said, declining to provide details.

©2022 Bloomberg L.P.