The U.S. government will exempt the German units of Russian oil major Rosneft PJSC from sanctions indefinitely, Reuters reported on Wednesday, noting that the exemption applies to Rosneft Deutschland and RN Refining & Marketing, both of which have been under German federal trusteeship since 2022.
According to Germany’s Economy Minister Katherina Reiche, the U.S. issued a “Letter of Comfort” on Tuesday, acknowledging that the two businesses had been fully separated from their parent company in Russia. The indefinite status succeeds a previous temporary waiver that was set to expire on April 29, 2026.
The Trump administration has moved quickly to avert potential fuel shortages in the country amid the ongoing conflict in the Middle East. The exemption secures operations at major German refineries, most notably the giant PCK Schwedt refinery as well as stakes in the MiRo and Bayernoil plants. The refinery supplies roughly 90% of the fuel for Berlin and the Brandenburg region. PCK Schwedt has a crude oil processing capacity of approximately 11.5 to 12 million tonnes per annum (Mtpa), or roughly 230,000 to 236,000 barrels per day, and supplies ~12% of Germany’s fuel.
The refinery has been under the fiduciary management (trusteeship) of the German Federal Network Agency (Bundesnetzagentur) since 2022, effectively decoupling management from the Russian parent company. Without the U.S. waiver, the refinery would face severe and potentially terminal business restrictions, as banks and insurers would fear falling under U.S. sanctions for servicing a Russian-owned company. The exemption ensures that payments, insurance and maintenance activities can continue, allowing the German-run trusteeship to operate the plant.
Europe is facing significant economic and security risks due to a sharp escalation in the Middle East conflict. European natural gas futures surged nearly 60% to a on-year high at €53.80 per megawatt-hour earlier in the week after Iran blocked the Strait of Hormuz and drone attacks hit Qatari LNG facilities, the world’s largest. The LNG plant remains offline while the Strait of Hormuz is largely closed, increasing the risk of supply shock. Italy, Belgium and Poland are most exposed to the disruption due to their heavy reliance on Qatari LNG.
By Alex Kimani for Oilprice.com
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