The German town of Schwedt is facing potential mass layoffs due to issues at its local refinery, triggered by EU sanctions that have cut off access to Russian oil.
According to Politico, authorities in Schwedt are advocating for the lifting of sanctions on Russian oil due to growing difficulties at the local refinery, which previously relied on Russian supplies. The request comes as the town faces potential economic hardship.
The report highlights the Schwedt PCK refinery, Germany’s fourth-largest, where Rosneft still holds a majority stake. This refinery, which supplies over 90% of Berlin’s oil, lost access to Russian crude in 2022 when Moscow halted pipeline deliveries to Poland and Germany following EU sanctions.
Despite switching to alternative sources, the refinery hasn’t returned to full capacity and is currently operating at 80%, according to Danny Ruthenberg, chief of the refinery’s works council. He cautioned that the facility is now operating at a loss due to fixed operating costs and may be forced to implement layoffs if the situation continues.
Schwedt Mayor Annekathrin Hoppe told Politico that the refinery’s struggles are a threat to the entire town, as approximately 20% of Schwedt’s 30,000 residents depend on it for their livelihoods.
“The refinery is the reason the town exists,” Hoppe stated, adding that she plans to appeal to the federal government for action, including the resumption of Russian imports.
“Of course we don’t accept the war… but traditionally we have always had good relations with Russia.”
Ruthenberg echoed this sentiment, suggesting that renewed Russian supplies could stabilize the refinery’s operations. “When peace is there again, then you have to trade with Russia,” he said.
Russian energy exports to the EU have significantly decreased due to sanctions and further declined after Kiev allowed a key gas transit agreement to expire in January. Brussels has since been pushing to completely phase out Russian energy imports by 2028. However, countries like Slovakia and Hungary are against this move, while experts and opposition parties across the bloc are pushing for a return to Russian supplies, especially given that Moscow and Kiev have resumed direct talks regarding a potential peace agreement earlier this year.
“Pressure will definitely grow” on German and EU authorities, Stefan Meister of the German Council on Foreign Relations told Politico, as “more voices from different companies… politicians on the local level demand returning to cheap Russian oil and gas.” Sources in Brussels also indicated to Politico that if Germany were to reverse its stance on Russian energy, other EU nations, including Italy, Austria, Bulgaria, and the Czech Republic, would likely follow suit.
Moscow has consistently denounced Western sanctions as illegal and counterproductive, particularly those targeting energy, citing price increases in the EU after the initial measures against Russia in 2022. Russian officials have warned that the bloc’s rejection of Russian supplies will force it to rely on more expensive alternatives or indirect Russian imports through intermediaries.
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