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Russia Squeezes European Gas Supplies Amid Sanctions

Pipeline Ukraine
If Russia turns off the gas this winter, Europe may freeze.
  • Why it matters

    Why it matters

    Reduced Russian gas supplies to Europe could mark a further escalation of the Russian-Ukraine conflict and potentially endanger Europe’s economy.

  • Facts

    Facts

    • Polish gas trading firm PGNiG said it has seen Russian gas supplies reduced by as much as 45 percent.
    • Austrian gas distributor E-Control reported a 15 percent cut in supply, while German utility E.On reported “limited” supply cuts.
    • Most European countries can last at least three months without Russian gas, a study showed.
  • Audio

    Audio

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Even before a new round of European Union sanctions against Russia came into force Friday, Russia began reducing gas supplies to some European countries, opening a new front in the escalating crisis with the West.

Poland, Slovakia, Germany and Austria reported reductions in gas deliveries from Russia this week. Russia’s majority state-owned energy giant Gazprom has denied it is cutting supplies.

For analysts and regulators, the biggest question is what is motivating Russia to make the reductions. The shortages could merely be the result of technical problems or Gazprom could once again be using Europe’s dependence on natural gas as a lever in its dispute with Ukraine.

The Russian government has not commented on the reductions, leaving the denials to Gazprom.

The reduction in deliveries has sparked alarm in Poland, which has a great dependence on Russian gas and on Thursday halted its own gas exports to Ukraine. For other European countries like Germany and Austria, where if anything there is an over-abundance of gas reserves on the market, regulators and companies said the short-term cuts would have no real impact on their ability to supply consumers.

“The underlying thing that has continued during the crisis has been this gas dispute,” said Trevor Sikorski, head of research of gas, coal and carbon fuels at Energy Aspects, a research consultancy in London.

 

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