Poland Wants to Halt Russian Oil, Gas on Ukraine Invasion
Poland Wants to Halt Russian Oil, Gas on Ukraine Invasion
(Bloomberg) -- Poland wants to stop importing Russian oil, gas and coal this year, as moves intensify to wean Europe off its dependence on energy supplies from the country over its war in Ukraine.
Poland plans to “do everything” to stop importing Russian crude by the end of 2022, Prime Minister Mateusz Morawiecki said on Wednesday. He also urged other European Union nations to follow suit and called on the bloc to impose a tax on Russian hydrocarbon imports that would penalize stragglers.
“We’re presenting the most radical plan in Europe to shun Russian oil, Russian gas, Russian coal,” Morawiecki told reporters. “This plan is necessary for Europe to finally come to its senses.”
Morawiecki has repeatedly pressed the EU to toughen sanctions on Russia for its invasion in Ukraine, arguing that the Kremlin is using its oil and gas imports to blackmail member states. Separately, Germany said last week it will stop almost all Russian oil and coal imports this year.
Poland’s plan could turn out to be costly for its two state-owned refiners PKN Orlen SA and Grupa Lotos SA, unless more countries decide to give up Russian oil. Russia supplied Poland with about 365,000 barrels of oil a day before the pandemic began in 2019, accounting for 70% of the country’s total crude imports.
“If other companies in the region like Mol or Total in Germany continue to get highly discounted Russian crude oil, it might be difficult for the Poles to pass on those increased costs,” Wood & Co. analyst Jonathan Lamb said in an email.
Orlen, Poland’s largest refiner, can ensure stable deliveries when supplies from Russia stop, the company said on Wednesday. The state-owned company hasn’t been buying Russian oil on the spot market since the invasion began last month and has ordered 28 tankers for its refineries in Poland, Lithuania and the Czech Republic from other directions.
Chief Executive Officer Daniel Obajtek said longer-term contracts with Russian suppliers give his company “some options” for their earlier termination. He has perviously said that Orlen’s contract with Rosneft PJSC ends this year and the one with Tatneft PJSC runs for another three years.
Still, Orlen may be better positioned to diversify away from the Russian oil after it partnered with Saudi Aramco for the acquisition of Lotos in January. Orlen will get 45% of oil to all its refineries from the Saudi Arabia as part of the deal, which also gives its Middle East partner 30% stake in Lotos’ refinery on the Baltic Sea coast.
Poland will also stop buying coal from Russia by next month or May, Morawiecki said. The country’s long-term gas contract with Russia expires at the end of this year and the government in Warsaw has repeatedly said it doesn’t plan to extend it.
Emergency Plan
Shortly before the Polish announcement, Germany said it was activating an emergency plan to help Europe’s largest economy manage limited energy supplies, as concerns mount that Russia could shut off natural gas deliveries.
The government in Berlin initiated the first of three possible phases of the plan to deal with squeezed energy supplies, Economy Minister Robert Habeck said Wednesday at a media briefing. The first phase involves intensive monitoring of gas consumption and reserves.
The move comes after Russia insisted that energy payments be made in rubles instead of euros or dollars, a demand that German government officials have rejected.
European energy prices surged. Benchmark gas futures traded in the Netherlands jumped more than 13% after Germany’s announcement. German power for next year gained as much as 6%.
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