Russia announces new gas cuts to Europe as leaders visit Ukraine
French company Engie, the Slovakian SPP and the Austrian OMV have been informed by Gazprom of a supply reduction through the Nord Stream 1 pipeline
While the leaders of Germany, France and Italy toured the devastated areas of Ukraine on Thursday and showed their support for Kyiv, Russia’s state-owned energy giant Gazprom sent a new message to the European Union in response to the sanctions that are crippling Russian industry. The French gas company Engie reported on Thursday that the gas supply it receives from Russia has decreased, a day after Berlin and Rome suffered a similar contraction in the undersea pipeline.
These three countries are not the only ones affected. The Slovakian gas company SPP revealed on Thursday that Gazprom has cut around 30% of the gas supply it had contracted, while OMV of Austria, a country that defends softer sanctions on Russia, also reported reductions.
Gazprom Chairman Alexei Miller told the St. Petersburg Economic Forum that his company is delighted with the supply cuts. “Yes, the pumping of gas to Europe has decreased by two percentage digits, but prices have not only remained the same, they have multiplied. If I said that we are not angry, I would not be lying,” stressed the oligarch, who also hinted that Germany should consider opening the second gas pipeline built between the two countries, Nord Stream 2, because “it has pressure and can supply gas from today.” Berlin suspended the certification of the gas pipeline last February and decided to paralyze the project due to the Russian aggression against Ukraine.
The shipment of Russian gas outside the post-Soviet space sank in the first half of the year by 28.9% compared to the same period last year, while its price has exceeded historical barriers. Miller has predicted that it will become even more expensive in Europe. “Demand will grow significantly in the Asia-Pacific market, and in the second half of the year European importers will battle with Chinese, Indian and other Asian buyers for the ‘golden’ liquefied natural gas.”
“Our product, our rules,” underlined the president of Gazprom, who predicted that the supremacy of the dollar and the Bretton Woods 2 agreements against protectionism are fading, and Russia’s turn has come. The company, Miller assured, has increased its supply to China by 67% in the first five months of the year.
The Chinese market hardly makes up for the European loss, however. According to the newspaper Vesti, China paid Russia $2.4 billion for its gas, both through pipelines and in liquefied form, for the four-month period between January and April. The European Union pays the Kremlin the same amount every three days, according to figures compiled by Reuters.
The origin of this new chapter of the gas war is in Canada, which repaired one of the turbines of the Nord Stream 1 gas pipeline that connects the Russian pumping stations with Germany under the Baltic Sea. The piece has not yet been returned to Europe, because Canada, by virtue of the sanctions against Gazprom, is withholding it, according to Siemens Energy. The energy company, which left the Russian market in mid-April, explained to this newspaper that the enormous reduction in gas supply cannot be attributed, however, only to “technical reasons” like this one.
Germany said that the Russian justifications regarding the turbine “are nothing more than an excuse” to destabilize the European Union. The accusation mirrors one made by Ukraine against Russia more than a month ago, when it requested to transfer the flow of gas passing through the Sojranivka station to a larger one, Sudya, after reporting that the separatist territories supported by Moscow in eastern Ukraine were keeping part of the gas meant for the EU.
Gas is the main source of financing for the Russian government, which is using the funds to pay for the war machine it has deployed in its offensive on Ukraine. Among other measures, the European Union has advocated reducing its gas imports by two thirds this year and cutting them off altogether in 2027. Several countries, such as Poland, Bulgaria and Finland, have seen their supply canceled for refusing to abide by the mechanism for payment in rubles defended by Putin.