Date: 6 October 2021

Russian Gas Trap: Gazprom Curbs Gas Transit Capacity

The price of gas commodities contracted for November is now four times higher in Europe than last year. If this winter is similar to the last one, the European Union will face a major energy crisis. Gazprom is taking advantage of the whole situation to push for European concessions on Nord Stream 2.

SOURCE: GAZPROM.RU

Russian gas exporter Gazprom has booked around a third of the gas transit capacity it was offered for October via the Yamal-Europe pipeline. Russian gas supplies via the pipeline fell by almost 77 percent from October 1. However, the Kremlin says the company is supplying customers with gas in full compliance with existing contracts. Already high natural gas prices in Europe could scale new heights due to low gas storage levels and growing demand, according to the CEO of Gazprom Alexei Miller. Delayed efforts to replenish gas stocks are largely due to the Russian company. Gazprom is in compliance with its deals, but until recently the firm got commodities from EU-based storage facilities, and not from Russia, before delivering them to customers. In recent months, deliveries shrank by five times than the year before. Gazprom is unwilling to send more gas to Europe than it had to under long-term deals. Russia is making double gains from this. First, it is due to the eye-watering gas price, prompting record-high profits for Gazprom and the federal budget. Secondly, in case of harsh winter, Gazprom will be in a position to dictate conditions, also by forcing consent to launch the Nord Stream 2. Ukraine will be first to fall victim to Gazprom’s strategy as shown on October 1. In the morning, the Russian gas giant suspended the transit of gas to Hungary via Ukraine before saying a few hours later that gas would flow to Hungary and Croatia via the new TurkStream link and gas transmission systems in Bulgaria, Serbia, and Hungary. Undoubtedly, Gazprom will seek to repeat the “Hungarian scenario” in other countries in the region.

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