As Europe tries to assess the consequences of the US-Ukraine minerals deal, the continent is thinking about the access and trade flows of raw materials. This includes staunch Ukraine ally Germany, which is increasingly dependent on Russian fertiliser, according to a report in Tagesschau. Despite the oil and gas embargoes, fertilisers are not on the sanctions list and are low-cost compared to fertilisers produced in the EU. The European elite, with its lofty determination to isolate Russia, has been undone by the brute reality of economics. Where there is a market, there is a way.

And a market there is, as fertilisers have become too expensive. Following Russia’s invasion of Ukraine, prices for fertilisers shot up and have been volatile ever since, while prices for wheat, the largest crop in Germany by far, plummeted on the futures exchanges last year. Prices for fertilisers have risen by 30% according to one farmer, while wheat prices have fallen. Will German farmers still be able to produce flour from conventional farming if this price mismatch continues? Cheap Russian fertilisers offer a relief to the predicament.

The season is starting and demand for Russian fertilisers is high. In 2024 alone, Russian fertiliser exports to the EU rose 33% compared to the year before. Amongst all countries from which the EU is importing fertilisers, Russia is now the most important trading partner, with about 6.2 million tonnes worth over €2.2 billion since the beginning of the war in Ukraine.

How does Russian fertiliser get to the EU? Germany’s public-service broadcaster ARD tracked down cargo from EuroChem, a company registered in Switzerland which is producing in St Petersburg. Tracking their movements revealed that cargo ships are regularly commuting over the Baltic Sea, bringing fertilisers to the ports of the EU’s single market. For example, the freighter Kalin transported 5,500 tons of fertiliser from Vyborg in Russia to Bremen last March. Neither product nor cargo ship was on the sanctions list, so the customs were cleared.

There is political pressure from Brussels and Berlin to put an end to this trade. This is not just because it raises tax revenue for Moscow: recent reports have detailed that Russian fertiliser manufacturers are more directly involved in war production than previously thought. Ammonia, used as fertiliser, also has various military applications. EuroChem supplied 38,000 tons of acetic acid, which is used as rocket-propellant, to Russian munitions factories, according to Reuters.

But if Brussels imposes sanctions on fertilisers, what about the farmers? Unconventional farming that does not use artificial fertilisers on a mass scale is a long way off. Protesting and asking for more subsidies is more likely.

It is not just Russian fertiliser, though, that the EU has to worry about. Despite an embargo, European involvement in the Russian oil trade has not ended. Greek shipping firms are returning to handling Russian oil. Greece plays a significant role in seaborne oil transport, with the country’s tanker fleet accounting for about 23% of the world’s total by deadweight tonnage.

Oil prices have fallen and less expensive Russian oil is now below the G7’s $60-per-barrel price cap. As a result, ships carrying Russian oil are able to access Western maritime insurance, meaning that the Greek tankers can start handling it again.

Overall, the drop in oil prices is positive news for the prospect of a Ukraine peace deal. It hits the Kremlin’s biggest revenue source, making it at least a bit more difficult for it to sustain its military. The best conditions for a peace deal are what foreign policy experts call a mutually hurting stalemate: when both sides in a conflict are losing out by continuing to fight. Weak oil markets move this closer to being the case for Russia.

But it also shows the impotence of Europe’s sanctions. The G7 price cap has not been effective at putting a ceiling on the price of Russian oil. Instead, Russian crude gets pricier, and has often been above the cap, when global oil prices rise. Now it is sinking again — not because of the cap, but because global oil prices are falling.

What the price cap has arguably done, however, is forestalled even tougher sanctions on Russian oil. One discussed alternative at the time the cap was agreed was a total ban on the use of Western maritime insurance for ships carrying Russian oil. The price cap is an attempt to look like everyone is doing something while also not causing pain for Western countries, and the rest of the world, by gumming up the global oil market.

Dependence on Russian oil and fertiliser is another sign that Europe has more ties with Russia than we might think. It’s a cobweb of dependencies that was never going to be easily severed.

This is an edited version of an article which originally appeared in the Eurointelligence newsletter.

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