Germany to increase Kazakh crude oil imports, won't circumvent Russia sanctions
Germany will sign two contracts to increase oil imports from Kazakhstan for Berlin's main Schwedt oil refinery, sources told Reuters on Sunday.
German Chancellor Olaf Scholz will be in Kazakhstan and Uzbekistan on Monday and Tuesday, on his first visit to Central Asia as Berlin looks for new markets and sources of energy and minerals in the wake of the Ukraine war.
Under the agreement, a monthly supply of 100,000 tonnes of crude oil will be secured until the end of 2025, with a second contract for the supply of up to 50,000 tonnes per month.
The PCK Schwedt refinery has already been purchasing these additional quantities for three months, but they will now be contractually fixed.
Kazakh oil imports have kept the Schwedt refinery running after a sharp drop in Russian oil supplies following European Union sanctions on Moscow for its February 2022 invasion of Ukraine.
Representatives of the German subsidiary of Russia's Rosneft, Rosneft Deutschland, which Berlin put under a trusteeship last year, will sign the agreement in the Kazakh capital Astana.
In 2023, Kazakhstan exported 8.5 MMt of oil to Germany, accounting for 11.7% of Germany's total oil imports, and up from around 6.5 MMt before the Ukraine war.
That jump made Kazakhstan Germany's third-largest supplier after Norway and the United States, data from Germany's Federal Statistics Office showed.
Germany is interested in expanding trade with Kazakhstan while also ensuring such trade is not used to circumvent EU sanctions on Russia, Chancellor Olaf Scholz said on a visit to the Central Asian nation.
"I am grateful for the trusting dialogue between us, through which we want to prevent trade between us from being misused to circumvent sanctions," Scholz said.
After Russian forces invaded Ukraine in February 2022, the West imposed sweeping sanctions on Russia, prompting Moscow to seek circuitous routes for importing technology and goods.
Sources have said that Russian businesses seeking goods banned by the West sometimes procured them from companies based in neighboring Kazakhstan or other former Soviet nations. The Astana government has said it would abide by the sanctions.
Both Scholz and Kazakh President Kassym-Jomart Tokayev said their countries were interested in increasing trade in oil, rare earths, lithium and other raw materials.
"Both sides benefit from this exchange because it allows us to diversify our economies and make them more resilient," Scholz said. "A very concrete example of this is the oil supplies from Kazakhstan, which helped us a lot after Russia failed as a supplier."
The two met ahead of a broader meeting between Scholz and all five Central Asian leaders, an example of more active Western diplomacy in what has traditionally been Russia's backyard.
Scholz's visit comes after Russian President Vladimir Putin threatened to curb sales of metals such as titanium to "unfriendly" nations.
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