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Russia has exacerbated a shortage of European natural gas supplies, which has risen to a 13-year price limit by quietly limiting sales to customers, according to executives and analysts.
Exports of the Russian state-backed Gazprom monopoly on natural gas pipelines to mainland Europe have fallen by about a fifth in 2021 to pre-pandemic levels, despite high rebound in demand and small deposits of significant fuel. The imbalance has helped keep prices in Europe at an all-time high since 2008, raising energy costs for homes and businesses.
The rise in prices comes at a time of unstable relations between Russia and the West. Russia said on Wednesday that its forces had fired warning shooters He says he has been denied by the UK in a British destroyer on the Crimean coast. At the same time, Germany and France have this week sought to cool tensions with Russia, proposing a New EU plan To have a greater relationship with Moscow.
Energy industry executives and analysts said that while Gazprom was fulfilling its long-term contractual obligations, reluctant to boost supplies in Europe through immediate measures, such as spot market sales, was putting pressure on the market.
“Gazprom is trying to maximize its profits when spot prices are high, when gas storage is empty and Asian LNG demand is strong,” said a director of the German energy company. “They’re being opportunists.”
Gazprom said in a statement that it “supplies gas according to consumer demands.” “It is based on these demands, as well as opportunities to optimize the portfolio that keeps the company’s transportation capacity in specific directions,” he added.
Several industry players say Gazprom’s moves are designed to help prices and are aimed at putting pressure on EU governments to accept them. Controversial Nord Stream 2 pipeline European.
“Gazprom is effectively telling the EU: give the green light to Nord Stream 2 and we will send you all the gas you need,” said Tom Marzec-Manser, European gas analyst at ICIS.
“No, and we won’t. We will not ship additional gas through Ukraine and you have seen what this means at wholesale prices in a tight world [liquefied natural gas] the market, ”he added.
Nord Stream has not commented.
The Nord Stream 2 pipeline, which is almost complete, has faced economic and legal sanctions from the US and opposition from Eastern European countries, who have argued that Russia will increase its leverage with the continent’s energy supply.
Pipeline crossing the Baltic Sea directly to Germany.
it also avoids Ukraine, which is heavily dependent on gas transportation rates
From Russia to help its economy. Russia has sided with the proxy war
The territory of eastern Ukraine since 2014, when Moscow annexed Crimea.
Germany has been a long-term contributor to the Nord Stream 2 project. Following the administration of the roads, the launch of the pipeline will be approved this year refuse additional penalties against the pipeline operator that Washington could not finish in a silent admission. But the German election could push for a green party against the pipeline in September.
Ronald Smith, a senior oil and gas analyst at BCS Moscow, said: “Gazprom, we must say, is in no hurry to voluntarily hire non-contracted accessories. [gas supplies] Through Ukraine “.
Murray Douglas, advising Wood Mackenzie, said he was surprised that Russia had not started increasing exports through Ukraine earlier this year, but argued that Gazprom’s stance could be a greater nuance.
“In previous Covid years, Gazprom was building its market share in Europe and providing what was needed, but it may now be more difficult to ship large volumes through Ukraine,” he said.
Analysts say Gazprom’s stance is not the only reason for rising prices but it has exacerbated the rally. A cold winter has drained the amount of natural gas stored in Europe to a nine-year low, while natural services have boosted demand for natural gas burning instead of coal from more than € 50 a tonne of EU carbon allowances.
There is a tight global gas supply, with more LNG cargo going to Asia than Europe. But Russia is seen as a country with enough production capacity to reduce the rally.
Analysts say limiting sales in the local market is a quiet deviation from Gazprom’s past practice of largely supplying as much gas as customers want. It may become Russia’s strategy to become similar to Opec, as Moscow has been collaborating with the Oil Suppliers cartel since 2016 to manage oil supplies and help with prices.
Elena Burmistrova, Gazprom’s chief export officer, denied that there had been a change in strategy last month but admitted there had been requests for additional volumes. In May he said the company would be “able to supply additional demand” with the “launch of the Nord Stream 2 pipeline”.
According to ICIS’s Marzec-Manser, Gazprom “was taking advantage of the state of global supply to believe that it was trying to get the result they really want.”
“They could already solve this problem, but they’re not choosing. It’s hard to argue that the extra cost of shipping across Ukraine is too high when prices are so high. People in the industry are realizing that there is something more strategic at stake.”
Additional report by Henry Foy in Moscow and Nathalie Thomas in Edinburgh
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