German Chancellor Olaf Scholz reiterated March 23 his opposition to any immediate curbs on EU imports of Russian fossil fuels, warning that any such moves would plunge the region into an economic recession.
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Speaking to the Bundestag parliament, Scholz said German will continue to look to reduce its dependency on Russian oil and gas but warned "hasty" action could trigger a recession.
"We will end this dependency as soon as possible," said Scholz. "If you take hasty steps, however, Germany is threatened with a recession....the sanctions should not hit the EU harder than the Russian leadership,"
"Hundreds of thousands of jobs would be in danger and entire branches of industry would be pushed to the brink," he said.
Scholz said he expects that existing financial sanctions and others against Russia would be tightened, but noted that the effects of the sanctions would only become apparent "after weeks."
Germany, Europe's biggest economy, is heavily dependent on Russian energy, with about half of its gas and coal imports and more than one-third of its oil imports coming from the country.
Germany is the biggest buyer of Russian gas and is particularly dependent on imports from Russia to meet demand. Russia's state-controlled Gazprom sold 45.8 Bcm of gas in Germany in 2020, and increased sales by 10.5% last year, implying a total of 50.6 Bcm in 2021.
Related Infographic: How much Russian oil does Europe import?
Scholz's comments come amid growing speculation over potential EU energy curbs on Russia, with EU heads of government set to meet with US President Joe Biden on March 24 to discuss the response to the war.
Pressure on the EU to announce some measures to cut its imports of Russian oil and gas have been growing with European member states such as Ireland and Lithuania calling for a ban on Russian oil to ramp up pressure on Moscow.
Although there are no official EU-level sanctions in place for buying and using Russian oil, about 2 million b/d of Russian crude and 700,000 b/d of its oil product exports have already been disrupted as a result of refiners and traders "self-sanctioning," according to S&P Global Commodity Insights.
The EU's latest round of sanctions on Moscow, announced March 15, target transactions with Russian banks and financial institutions, which has increased the complexity of transacting energy deals via Russian institutions.
The European Commission has also already said it plans to propose by mid-May the phase-out of Russian fossil fuels by 2027.
The EU imported 155 Bcm of Russian gas in 2021, accounting for around 45% of EU gas imports and close to 40% of its total gas consumption.
Europe was importing about 2.7 million b/d of Russian crude, around a quarter of total imports, and another 1.5 million b/d products, mostly diesel, before the invasion of Ukraine.