The German government is likely to take over the local operations of the Russian oil company Rosneft. With this, the rupture between the two countries deepens. The said move aims to finish the crisis facing Rosneft’s refinery in Schwedt in north-eastern Germany. It depends almost exclusively on supplies of Russian crude oil through a Soviet-era pipeline. Schwedt is a key supplier of jet fuel and vehicles to Berlin. The move will also be covering refineries in Karlsruhe and Bavaria.

Rosneft accounts for 12 per cent of oil refining capacity in Europe’s largest economy. All gas stations in the country will also be taken under state control. The government would soon announce a comprehensive package of support measures that would include arrangements for crude supplies from other sources.

The action by Germany reprises a similar step against Russian gas monopoly Gazprom (MCX: GAZP) earlier this year. The latter cut supplies through its pipelines which caused an intense price squeeze, crippling major gas suppliers such as Uniper.

Under current EU-coordinated plans, Germany aims to stop importing Russian crude oil and refined products from the end of the year. Reportedly, Schwedt had been granted an exemption from the embargo, but Rosneft’s majority control of the refinery made it impossible to negotiate deals to source supplies from elsewhere. Another factor that has complicated the issue is finding replacement sources. Schwedt is configured to take the Russian benchmark crude blend Urals, which is relatively heavy and high in sulfur content.