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Ukraine invasion: How reliant is Switzerland on Russia for energy?

Russia’s invasion of Ukraine is set to have widespread repercussions throughout Europe and the world. What will it mean for energy supplies in Switzerland?

Warm steam rises from a chimney on a house in the Swiss canton of St Gallen. Photo by Nadine Marfurt on Unsplash
Warm steam rises from a chimney on a house in the Swiss canton of St Gallen. Photo by Nadine Marfurt on Unsplash

On Monday, February 28th, Russia’s invasion of Ukraine continued, with the Russian military laying siege to several of Ukraine’s largest cities. 

From a Swiss perspective, one of the major impacts is likely to be on energy prices.

Like many European countries, Switzerland imports Russian natural gas and oil for energy production, while the indirect impact of warfare on global markets is also likely to be felt in Switzerland. 

What does the conflict mean for oil prices? 

Russia is a major producer of oil and gas, much of which is consumed here, although the direct impact of the conflict is unlikely to be significant for Switzerland, at least in the short term. 

While the impact of direct imports may be minimal, the pinch however may be felt as part of a broader global spike in oil prices. 

Around a quarter of Switzerland’s petroleum needs come from the Swiss refinery in Cressier. Russia supplies relatively little crude oil for this plant, with the majority coming from the United States, Nigeria and Libya. 

The remainder of Switzerland’s petrol imports, around 75 percent, is already refined, with the majority of that coming from France and Germany.

Swiss news outlet Watson reports that it is difficult to determine exactly how much of the refined petrol originally comes from Russia, although approximately 25 percent of the European Union’s crude imports are of Russian origin. 

Daniel Hofer, president of Avenergy (formerly Petroleum Union), said motorists may pay more than CHF2 per litre at the pump as a result of a global climb in oil prices. 

“A further rise in the crude price is likely if the situation continues to worsen,” according to Daniel Hofer, president of Avenergy (formerly Petroleum Union).

If payment traffic is interrupted, there is also a risk of gas deliveries from Russia stopping, and oil will automatically become more expensive.

 “We are going to have petrol prices above 2 francs and they will probably stay at this level for some time yet”, Hofer said.

READ MORE: Where in Switzerland can you find the cheapest fuel?

What about gas?

While the reliance on Russian oil is comparatively minimal, Switzerland has a heavier reliance on Russian gas. 

Natural gas provides around an eighth of Switzerland’s total energy supply.

Problematically, Switzerland does not have any capacity to store gas in order to prevent insecurity of supply. This is despite a federally mandated store of a variety of other things, including foodstuffs and medication. 

Coffee, opiates and nuclear fuel: What are Switzerland’s ‘strategic stockpiles’?

Switzerland buys most of its gas through various European distribution centres, although an estimated 47 percent of this is of Russian origin. 

Although this appears to be a potential vulnerability, experts are not convinced the conflict will see Russia turn off the tap. 

Grünwald is convinced that “Russia will continue to honour its delivery contracts”, regardless of how the conflict plays out.

As a last resort, Switzerland would be able to buy petrol from other countries, especially the United States, while Switzerland could also increase its import of Norwegian and EU natural gas, which is currently at 24 percent and 19 percent respectively. 

READ MORE: Ukraine conflict: Will Switzerland impose sanctions on Russia?

Swiss companies working in both Russia and Ukraine also don’t expect any major consequences on their operations.

Among them is Stadler Rail: the Thurgau train manufacturer signed several “memorandums of understanding” with Ukrainian partners in 2021 regarding the development of the railways in that country.

The current crisis “could possibly lead to delays in the development of the market”, said said Gerda Königstorfer, group communications director.

The Zurich industrial group Sulzer, for its part, considers that its exposure to Russia and Ukraine is “minimal”. Russia accounted for only 3 percent of orders in 2021, and Ukraine for none.

“The impact for Sulzer in the event of sanctions is negligible.”

Other companies that could be somewhat affected include Zug-based Nord Stream. This international consortium counts the Russian group Gazprom among its shareholders. It is responsible for the construction of two pipelines.

READ MORE:  Ukrainians in Europe: How will Russia’s invasion and the war impact your lives?

What happens in the instance of a shortage? 

While Switzerland may not store gas to any large degree, security of energy supply is maintained through the storage of extra-light heating oil. 

In the event of a crisis, plants are able to switch from gas to heating oil combustion. 

These are known as ‘dual-fuel systems’.

It is however difficult to determine how much strategic reserve Switzerland currently has as the reserves are kept by the private sector, rather than governments. 

The industry is required to keep emergency supply that will last 4.5 months

The Federal Office for National Economic Supply (BWL) told Switzerland’s Aargauer Zeitung newspaper that energy companies were already planning for a possible breakdown in supply. 

“The operators have already become active,” the BWL said.

“Operators of dual-fuel systems check their business continuity management and the filling level of their heating oil storage. This helps companies with dual-fuel systems to be able to switch from natural gas to heating oil in an emergency.”

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‘Limited capacity’: How the Swiss right wants to shut out western Ukrainian refugees

With about 51,000 refugees from Ukraine currently in Switzerland, right-wing politicians argue in favour of introducing geographic vetting in regards to who can qualify for Status S, saying Switzerland has "limited capacity" for refugees.

'Limited capacity': How the Swiss right wants to shut out western Ukrainian refugees

After Russia invaded Ukraine on February 24th, the Federal Council activated, for the first time ever, the ‘S status’ authorising Ukrainians and Ukraine residents fleeing the war to live temporarily in Switzerland.

The special status is initially valid for a year, but can be extended. Anyone who is still in Switzerland after five years receives a B permit.

Included is also the right to work, as well as free health care and language courses. The refugees also have the right to free public transportation, but this perk will end on May 31st, with no word yet whether it will be renewed.

READ MORE: Switzerland’s special ‘S permit’ visa program: What Ukrainians need to know

Now, however, “the great solidarity with refugees from Ukraine is cracking”, according to SonntagsZeitung, which reports that rightwing politicians in Switzerland are “beginning to question our country’s culture of hospitality”.

The right-wing Swiss People’s Party (SVP), which has consistently opposed sanctions on Russia, is calling on the government to limit the S status  only to Ukrainians who come from the eastern part of the country, which is currently most impacted by Russia’s invasion.  

This movement is spearheaded by MP Martina Bircher, who argues that Switzerland is reaching its limits in terms of the number of refugees it can accommodate and support, and it should therefore grant S status only to those fleeing the most conflict-ridden regions of Ukraine, like the eastern part.

Other right-of-centre groups are in favour of this “regionalisation” as well. Andrea Caroni, president of the centre-right Liberal Party, supports the idea of granting the special status based on the geographical evolution of the Ukrainian conflict, saying Switzerland “ultimately has limited capacity” to absorb refugees from Ukraine. 

He said, however, that such a measure “must be coordinated at the European level.”

Not everyone, however, agrees with Bircher’s proposal.

According to Gerhard Pfister, president of the Centre Party, adopting geographical limitations “would create two classes of Ukrainians. This is not right”.

It is unclear how the SVP would seek to draw barriers to distinguish between the east and west of the country. 

As for the Conference of Cantonal Directors of Social Affairs, vice-president Marianne Lienhard said the organisaton will discuss the proposal at its next meeting at the end of May.

Cantons are directly affected by the influx of Ukrainians, as they will eventually bear the cost of supporting the refugees — the cost which is currently borne mostly at a federal level.

The “NZZ am Sonntag” calculated that in 2022, the costs of housing, health insurance, and general support will amount to between 1.25 and 2.25 billion francs. In 2023, these expenses could climb to 7.5 billion.

“Fake” refugees

In an article she wrote for the SVP website, Bircher also argued that some refugees pretending to be Ukrainian actually aren’t.

As an MP from Aargau, she claims that out of 12 people who received the S status in a small town in her canton, only seven were Ukrainian nationals. The other five came from Africa.

Among them are  “Kenyan and Lebanese men who claim to have lived in Ukraine or who actually lived there before the war, but who do not have a Ukrainian passport”.

The S permit scheme does not only provide protection for Ukrainian citizens, but also citizens of other countries who live in Ukraine. 

While reserved predominantly for Ukrainians, the S status has also been occasionally granted to citizens of other countries. 

According to the State Secretariat for Migration (SEM), about 1,000 “other” refugees received this status as well, including 238 Russians, and  people from Germany, France, Italy, the United States, Canada and Australia.

In such cases, children have a different passport from their parents, but it is the parents’ nationality and place of residence that defines whether the status is granted.

So it could happen that the parents have Ukrainian passports, while their children are citizens of other nations.

READ MORE: Swiss MPs call for Russian money to be used to reconstruct Ukraine