Management at the PCK Schwedt refinery - a Rosneft-controlled facility - has informed German authorities that U.S. sanctions are harming its business operations and risk interrupting fuel deliveries to the capital and surrounding region, according to correspondence seen by Reuters. In a January letter to Economy and Energy Minister Katherina Reiche, refinery management made an "urgent appeal" to break an impasse with the United States over the plant's future.
The letter chronicles mounting difficulties at the refinery, which provides fuel for approximately nine out of 10 cars in Berlin, supplies the citys airport, distributes petrol across the state of Brandenburg and eastern Germany, and produces key feedstocks for the chemicals sector. Management warned that "The consequences of the ongoing sanctions affect the security of supply for the region." It added that "We are already experiencing ... restrictions in our operating business," and urged the government to secure a permanent exemption from U.S. sanctions.
Berlin won a temporary exemption late last year from unilateral U.S. measures aimed at constraining Russia's energy sector. That licence is due to expire on April 29. The refinery's operations, however, rely on an ecosystem of long-term supply contracts, banks to process payments and insurers to underwrite oil cargoes - all elements that industry participants say are being undermined by fears of being drawn into sanctions exposure.
One individual with direct knowledge of the matter said those pressures could hasten a sale of the German business. Rosneft has been exploring buyers for its German operations but has not secured a transaction. The correspondence indicates that one oil group and a sizeable energy investor had considered purchasing the business.
Suppliers and customers voiced concern about the implications for regional fuel logistics. Unimot, a Polish fuel importer that purchases roughly 2 million tons of fuel per year from Schwedt, warned of limited alternatives. "Theres no way to replace that refining and logistical capacity in terms of supplying fuels for Brandenburg but also for Poland. This is a result of a gross neglect by Germany to resolve the Rosneft issue," said Robert Brzozowski, Unimot's deputy chief executive. He noted that April supplies were already being contracted and that oil suppliers were anxious about whether a vessel delivering crude on April 29 could be viewed as violating sanctions.
Industry sources said the October sanctions on Rosneft and Lukoil - Russia's two largest oil companies - had already disrupted flows along a crucial supply artery that had been partially fed by crude from Kazakhstan. Although the sanctions were suspended for certain operations, they have nevertheless unsettled banks, insurers and Rosneft's main supplier, Kazakhstan, according to a source close to the situation.
Officials from the German federal government, the state of Brandenburg and refinery management plan to convene in the near term to explore possible responses, a third person familiar with the discussions said. The German energy ministry told Reuters it was engaged in talks over extending the U.S. licence and said it was committed to supporting the refinery.
Germany exercises significant influence over, but does not own, Rosneft's German operations. Rosneft's broader presence in Germany - including control of Schwedt and stakes in several other refineries - accounts for roughly one third of the country's refined oil volume, according to material cited in the correspondence.
The uncertainty prompted debate about potential ownership outcomes. Rosneft has sought buyers for its German assets without success to date, and the pressure created by U.S. measures is increasing calls for action by both the company and German authorities. One person familiar with German government thinking said options under consideration included a sale to a U.S. investor or a takeover by the German state. A U.S. official, speaking on condition of anonymity, said Washington had encouraged U.S. firms to consider acquiring Rosneft's German businesses, but that those companies had shown little recent appetite for investing in Europe.
A U.S. Treasury official was quoted as saying that "the Trump administration is committed to ensuring Russia does not profit from exporting energy until it stops the senseless killing." The January discussions on potential disposal of Rosneft's German operations were reported to have been raised when President Trump met Russian President Vladimir Putin at a summit the previous August in Alaska.
Requests for comment to Rosneft and the Kremlin went unanswered at the time the correspondence was reviewed.
Summary of key developments:
- PCK Schwedt management has delivered a formal appeal to Germany's economy and energy minister, citing operational restrictions tied to U.S. sanctions.
- A temporary exemption currently shields the refinery from some measures but is scheduled to lapse on April 29.
- Banking, insurance and supplier concerns are creating practical barriers to routine business functions and raising the prospect of a sale or other structural changes.