If you travel north of Berlin, in Schwedt you come across a landscape of chimneys and rusty metal that seems stuck in the sixties. It was there that communist Germany and the former USSR sealed their energy alliance, and the amazing thing is that this heritage continues to fuel the Berliners’ tank today. Although the official rhetoric speaks of a total break with the Kremlin due to the invasion of Ukraine, the reality at the PCK plant is different: the majority of the property remains in Russian hands, a Soviet vestige that Germany has not yet dared to completely expropriate.
It literally depends on the operation of PCK Schwedt that Berlin does not stop. The plant pumps 90% of the gasoline and kerosene consumed by the capital and the state of Brandenburg; It is the energetic heart that powers everything from domestic heating to airplanes at the international airport. As pointed out by an analysis of Financial Timesany stoppage in their machines – no matter how brief – would cause an immediate strangulation. It is not just a question of figures, but a real threat to the daily lives of millions of people that the energy sector monitors closely.
A trapped refinery
The PCK situation is a direct result of the Russian invasion of Ukraine in 2022. Following the start of the war, Germany decided to withdraw to the Russian state oil company Rosneft operational control of the refinery, placing it under state trusteeship. The measure was adopted under the Energiesicherungsgesetz (Energy Security Law) with the explicit objective of guaranteeing supply and avoiding an operational collapse of critical infrastructures, as explained by the German Government itself.
The guardianship affects the subsidiaries Rosneft Deutschland and RN Refining & Marketing, through which the Russian group controls stakes in three German refineries: PCK Schwedt, MiRo (Karlsruhe) and Bayernoil (Bavaria). On the whole, according to OSW datathese assets represent about 12% of Germany’s total refining capacity, making Rosneft one of the main players in the sector in the country. However, Berlin avoided expropriation of the shares. Rosneft retains 54% of PCK, a decision made out of fear of Kremlin retaliation against German companies in Russia and the risk of international litigation. as explained in the Financial Times.
Since then, the German Executive has been forced to renew the guardianship regime every six months by parliamentary vote. The State runs the plant, but cannot sell it freely, nor invest on a large scale in its modernization, nor offer stable legal guarantees to banks and suppliers, a legal limbo. which analysts consider unsustainable in the long term.
However, the fragility of this balance was revealed in 2025, when the United States imposed new sanctions on Rosneft as part of its policy of pressure on Moscow. The measure, adopted without prior coordination with Berlin, had immediate effects: banks blocked payments, suppliers suspended contracts and the refinery was on the brink of insolvency. as reconstructed Financial Times. To avoid a collapse of supply in the German capital, Washington granted a temporary exemption of six months, which allows PCK to continue operating until April 29, 2026. At the same time, he made it clear that Germany must once and for all resolve the issue of ownership of Rosneft assets on its territory.
Since then, Berlin has been negotiating against the clock with the US administration to achieve a new extension or design a legal framework that avoids future sanctions. Among the options studied is the conversion of the current guardianship into a public law trustlinked to the sanctions regime of the European Union. The goal is to demonstrate that Rosneft lacks effective control over the refinery without resorting to formal expropriation.
A key piece of the German energy system
Schwedt’s case is not anecdotal. A forced closure would force fuel to be transported to Berlin by thousands of trucks a day, coming from other regions of Germany, a scenario that industry sources describe as logistically chaotic and economically unfeasible.
In an economy already hit by high energy prices, the industrial slowdown and the costs of the energy transition, the impact would be immediate. Furthermore, PCK is the main economic engine of Schwedt, a city of about 33,000 inhabitants in the northeast of the country. It directly and indirectly employs thousands of people and is perceived by the local population as a matter of survival. “All buses, all police cars, all rescue services run on PCK fuel,” he explained. to Financial Times the social democratic mayor Annekathrin Hoppe.
But the question everyone will be asking: How is it possible that Germany still has a Russian refinery? The answer is in history. PCK Schwedt built in the sixtieswhen the then German Democratic Republic was integrated into the Soviet bloc. The refinery was designed to process Russian crude oil transported through the Druzhba – “friendship” in Russian – pipeline. a pipeline of more than 4,000 kilometers designed to seal energy interdependence between Moscow and Eastern Europe during the Cold War.
For six decades, the system operated without interruption. Even after German reunification and the fall of the Soviet Union, the flow of Russian crude oil continued, reinforcing a dependence that today weighs like an uncomfortable legacy. Unlike gas—where Germany nationalized strategic assets like Gazprom Germania, today renamed SEFE—, in oil, Berlin chose not to cross the line of expropriation.
Breaking that bond has proven more difficult than expected. Although PCK no longer processes Russian oil and sources mainly Kazakh crude and marine supplies through Poland and Germany, the transition has been more expensive and technically complex. As explained by the public channel Tagesschaualternative supply is largely dependent on the ports of Rostock and Gdansk, and doubts remain as to whether these routes allow sufficient plant load to be maintained.
Possible exits: sale, expropriation or permanent patch
Given the expiration of the US exemption, Germany is considering three main scenarios.
The first is for Rosneft to voluntarily sell its stake. In recent years there have been conversations with the Qatar Investment Authority, with KazMunayGas and with other actors, but all have failed, mainly due to disagreements over the price. In parallel, Shell, which owns 37.5% of PCK, has reactivated its attempt to sell its stake, according to sources cited by Reutersafter a previous agreement was frozen following the outbreak of war in Ukraine.
The second scenario is expropriation, a legally viable option from 2022 for reasons of energy security. However, it carries significant risks: international litigation, disputes over financial compensation, and potential Russian retaliation, including the interruption of Kazakh crude oil transit by the Druzhba pipeline. Even so, Financial Times points out that the German government has discreetly reactivated preparations for this option as a last resort.
The third path is to prolong the status quo through a more sophisticated legal framework. Berlin is committed to strengthening the current protection and continuing to negotiate extensions with Washington. The problem, analysts and opponents point outis that this solution does not allow structural investments nor does it provide true long-term security.
While Berlin negotiates with Washington and Moscow, Schwedt lives in uncertainty. Many residents they point out in the British media who feel “collateral damage” from geopolitics, a perception that has fueled support for extremist parties and pro-Russian formations in the region.
At the same time, the government is trying to offer a narrative for the future. A large investment is planned at the PCK industrial site to produce synthetic kerosene from green hydrogen and CO₂, the Concrete Chemicals project, backed by up to €500 million in public funds. The initiative is part of a “future package” aimed at offsetting the impact of the withdrawal of Russian oil and sustaining industrial employment in the region. according to national media.
However, even this project depends on a key condition: legal certainty over the refinery and its land, something difficult to guarantee as long as Rosneft remains the majority shareholder and sanctions continue to hang on a temporary US license.
A symbol of European contradiction
PCK Schwedt is much more than a refinery. It is the reflection of a contradiction that runs through Germany and much of Europe: the political desire to break with Russia in the face of the reality of infrastructure, contracts and dependencies built over decades.
While the European Union prepares to cut permanently energy ties with Moscow, Berlin continues to depend on a facility born of Soviet friendship. The calendar is ticking and the April 2026 deadline is approaching. Germany will then have to decide whether to stick with it, force a definitive break, or accept the cost—economic, political, and social—of expropriating an uncomfortable piece of its past.
For now, the refinery continues to operate. But its future, like that of the energy relationship between Germany and Russia, is far from resolved.
Image | PCK
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