The 94.6% Drop In Russian Imports Has Reshaped Germany’s Economy

German imports from Russia have plummeted by 94.6% from 2021 to 2024, dropping from €33.1 billion to €1.8 billion, largely due to EU sanctions following Russia’s invasion of Ukraine in February 2022. The decline is primarily attributed to a near-total halt in Russian energy imports, including a 99.8% drop in oil and gas and a 92.5% reduction in coal by early 2023. Germany’s exports to Russia also fell by 71.6%, from €26.6 billion to €7.6 billion, resulting in a trade surplus of €5.8 billion in 2024, the largest since the Soviet Union’s collapse. Russia’s share of German imports shrank from 2.8% to 0.1%, relegating it from the 11th to the 59th largest supplier.

Remaining imports are limited to metals, chemicals, and some food products, while German exports to Russia now mainly consist of pharmaceuticals and chemical products. Germany’s near-total cessation of Russian oil, gas, and coal imports has forced a rapid pivot to alternative energy sources. By 2024, Germany increased LNG imports from Norway, the US, and Qatar, and expanded renewable energy capacity (wind and solar). However, higher energy costs persist, with industrial electricity prices in Germany rising 30-40% since 2021, impacting manufacturing competitiveness.

Short-term energy shortages in 2022-2023 led to economic strain, with Germany entering a recession in 2023 (GDP contracted by 0.3%). Long-term, diversification reduces reliance on geopolitically unstable suppliers but requires sustained infrastructure investment (e.g., LNG terminals, grid upgrades). The trade collapse contributed to Germany’s economic slowdown, as high energy costs and disrupted supply chains hit industries like chemicals, automotive, and steel. Industrial output fell by 4.7% from 2021 to 2024.

Small and medium-sized enterprises (SMEs), which form the backbone of Germany’s economy, faced higher input costs, reducing profitability. Some firms relocated energy-intensive operations to countries with cheaper energy, like Poland or the US. The €5.8 billion trade surplus with Russia in 2024 reflects reduced imports rather than export growth, masking underlying economic challenges.

The drastic reduction in trade signals a broader decoupling from Russia, aligning Germany with EU and NATO efforts to isolate Moscow economically. This has strengthened transatlantic ties, with increased US energy exports to Germany. However, it has strained relations with countries like China and India, which continue to buy Russian energy and raw materials, complicating Germany’s global trade strategy.

Higher energy prices drove inflation in Germany, peaking at 8.7% in 2022 and averaging 5.9% in 2023. This reduced household purchasing power, with real wages declining by 4% from 2021 to 2024. Consumers faced higher costs for heating, electricity, and goods reliant on energy-intensive production, disproportionately affecting lower-income households.

The crisis accelerated Germany’s green energy transition, with renewables accounting for 55% of electricity production in 2024, up from 41% in 2021. However, reliance on coal and LNG as transitional fuels has delayed net-zero targets, with CO2 emissions rising slightly in 2022-2023. The energy crisis and economic fallout have fueled political tensions. The far-right Alternative für Deutschland (AfD) gained support (polling at 18-20% in 2024), criticizing sanctions and high energy costs. In contrast, the Greens and SPD advocate for continued sanctions and green investment, creating a rift in public opinion.

Eastern German states, historically more reliant on Russian gas and with cultural ties to Russia, express greater skepticism toward sanctions. Western states, more integrated into global markets, support EU policies. This divide is evident in regional election results, with AfD stronger in the east. Large corporations like BASF and Volkswagen have absorbed higher costs or shifted operations abroad, while SMEs and households bear the brunt of price hikes. This has sparked debates over government subsidies, with €200 billion in energy relief packages criticized for favoring big business.

While Germany aligns with EU sanctions, countries like Hungary and Slovakia maintain closer ties to Russia, importing significant energy volumes. This creates friction within the EU, with Germany pushing for stricter enforcement while others resist. Western nations, including Germany, have reduced Russian trade, but Global South countries (e.g., India, China, Turkey) have increased imports of discounted Russian oil and gas. India’s Russian oil imports rose from 2% to 40% of its total by 2024. This divide complicates global energy markets and Germany’s efforts to secure non-Russian supplies.

Germany’s shift toward US energy strengthens NATO unity but highlights Europe’s dependence on American LNG, raising concerns about long-term sovereignty. Meanwhile, Russia’s pivot to Asia (China now accounts for 50% of its exports) creates a competing Eurasian economic bloc, challenging Germany’s export markets. The 94.6% drop in Russian imports has reshaped Germany’s economy, energy landscape, and geopolitical stance, with lasting implications.

While it has accelerated diversification and green energy, it has also triggered economic hardship, inflation, and political divides. Internationally, the trade collapse underscores a fracturing global order, with Germany navigating tensions between EU unity, transatlantic dependence, and competition with a Russia-aligned Global South. The domestic divide—between regions, political factions, and economic classes—mirrors the international split, complicating Germany’s path forward.