German Chancellor Friedrich Merz said Berlin expects an exemption from new US sanctions for German subsidiaries of the Russian oil company Rosneft, according to Deutsche Welle. Merz stated that the issue will be discussed with Washington amid growing concern that the measures could affect Germany’s energy security. The US sanctions, introduced as part of a broader effort to curb Russian revenues, could inadvertently target Rosneft Deutschland and RN Refining & Marketing, which have been under German state trusteeship since 2022.
Energy security at stake
Although the two companies are managed by the German government, they remain legally owned by Russia’s Rosneft. This formal ownership structure creates legal uncertainty for banks, traders, and logistics partners, who risk losing access to US markets if they cooperate with entities linked to sanctioned companies. Several European banks have already warned that they may have to suspend operations with the Rosneft subsidiaries if no exemption is granted. The German government argues that Rosneft Deutschland is critical to national energy stability, holding stakes in three major refineries—PCK Schwedt, MiRo Karlsruhe, and Bayernoil Vohburg—covering over 10% of Germany’s oil refining capacity.
Berlin presses Washington for clarity
Berlin has begun talks with Washington, seeking to ensure that the companies can continue operations without breaching US law. Officials emphasize that any interruption could disrupt domestic supplies of fuel and diesel at a time of rising energy prices and geopolitical tensions. Germany’s push highlights the difficulty of aligning sanctions policy with practical energy needs while maintaining Western unity against Moscow.
Broader implications for Western sanctions
The US restrictions on Rosneft and Lukoil form part of Washington’s wider campaign to cut off financial flows supporting Russia’s war on Ukraine. While the US has not directly blacklisted the German subsidiaries, its “50 percent rule” automatically extends sanctions to entities majority-owned by targeted firms. This case illustrates the growing complexity of sanctions enforcement, where formal ownership may not reflect actual control or public interest. It underscores the challenges allies face in balancing legal compliance with economic security.
Political and international reactions
On October 22, hours before Washington announced the new measures, the United Kingdom lifted restrictions on Rosneft Deutschland and RN Refining & Marketing, allowing renewed cooperation with global energy majors such as Shell. Analysts suggest that if Washington grants Germany an exemption, other countries—like Hungary, which has close energy ties to Moscow—may demand similar treatment. Such developments could erode the coherence of the transatlantic sanctions regime and lead to a patchwork of selective exemptions.
Moscow’s potential response
The Kremlin is expected to exploit the Rosneft Deutschland case to highlight divisions within the Western alliance. Russian state media and lobbyists in Europe are likely to present Berlin’s stance as evidence of “pragmatism” and waning unity among Western partners. This narrative could serve Moscow’s efforts to weaken transatlantic coordination and sow discord over long-term support for Ukraine.
