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Russia has exacerbated the shortage of European natural gas supplies that has raised prices to a 13-year high by quietly limiting refill sales to customers, according to executives and analysts.
Exports of natural gas by pipeline from Russia’s Gazprom monopoly to mainland Europe have fallen by about a fifth in 2021 to pre-pandemic levels, despite a sharp rise in demand and low fuel reserves. . The imbalance has helped send prices to Europe to the highest levels since 2008, raising energy costs for households and businesses.
The rise in prices occurs during a period of volatile relations between Russia and the West. On Wednesday, Russia said its forces fired warning features in a British destroyer on the Crimean coast, he claims that the United Kingdom denied it. At the same time, Germany and France tried this week to cool tensions with Russia, proposing one new EU plan for a closer engagement with Moscow.
Energy industry executives and analysts said that while Gazprom was fulfilling its long-term contractual obligations, its reluctance to boost supplies to Europe through more immediate measures, such as timely sales to the market, would put pressure on the market.
“Gazprom is only trying to maximize its profits at a time when spot prices are high, gas storage is empty and LNG demand in Asia is strong,” said an executive at a German energy company. “They’re just opportunists.”
Gazprom said in a statement that it “supplies gas precisely in accordance with consumer requests.” “It is based on these same requests, as well as on the possibilities of optimizing the capacity of the portfolio that the company registers the transport capacity in certain directions,” he added.
Several industry participants said Gazprom’s moves appeared to be designed to support prices and could be aimed at pressuring EU governments to approve the controversial Nord Stream 2 pipeline in Europe.
“Gazprom is indeed telling the EU: give us the green light for Nord Stream 2 and we will send you all the gas you need,” said Tom Marzec-Manser, European gas analyst at ICIS.
“It simply came to our notice then. We will not ship additional gasoline through Ukraine and you have seen what this means for wholesale prices in a tight global context [liquefied natural gas] market, ”he added.
Nord Stream declined to comment.
The near-complete Nord Stream 2 pipeline has been harassed by legal and financial sanctions from the United States and opposition from Eastern European countries, who have argued it will increase Russia’s leverage on supplies. energy of the continent.
The gas pipeline, which crosses the Baltic Sea directly to Germany,
also overlooks Ukraine, which depends heavily on gas transit rates
from Russia to support its economy. Russia has supported a war of representatives in
The eastern territory of Ukraine since 2014, when Moscow annexed Crimea.
Germany has been the long-term sponsor of the Nord Stream 2 project. It is expected to approve the commissioning of the pipeline later this year after the administration of Biden. waived additional sanctions against the pipeline operator in a tacit admission that Washington could not prevent its completion. But German elections in September could boost the Green Party, which has opposed the pipeline.
Ronald Smith, a senior oil and gas analyst at BCS in Moscow, said: “Gazprom, we will say it is in no hurry to volunteer to deliver additional uncontracted [gas supplies] via Ukraine “.
Murray Douglas, a consultant for Wood Mackenzie, said he was surprised that Russia did not start increasing exports through Ukraine earlier this year, but argued that Gazprom’s position may be more nuanced.
“In the years leading up to Covid, Gazprom was building its market share in Europe and providing what was needed, but sending large volumes to Ukraine today may be more complicated,” he said.
Gazprom’s stance is not the only reason for the rise in prices, but has exacerbated the rally, analysts said. A cold winter has drained the amount of natural gas stored in Europe to its lowest levels in nine years, while demand for utilities to burn natural gas instead of coal has been bolstered by rising carbon quotas of the EU over 50 € per tonne.
Global gas supply is reduced, as more LNG loads sail to Asia and not to Europe. But Russia is seen as the only country with enough surplus production capacity to dampen the rally.
Analysts say limiting sales to the spot market is a quiet departure from Gazprom’s past practice of supplying as much gas as customers want. It is possible that Russia’s strategy will evolve and look more like Opec, the oil producer’s cartel with which Moscow has been collaborating since 2016 to manage oil supplies and keep prices down.
Elena Burmistrova, Gazprom’s chief executive of exports, denied last month that there had been a change in strategy, but acknowledged that there had been requests for additional volumes. He said in May that the company would be “able to supply additional demand” with “the launch of the North Stream 2 pipeline.”
Marzec-Manser, of ICIS, said it was in his view that Gazprom “was taking advantage of the global supply situation to try to get the result they really want.”
“They could have solved this problem, but they choose not to. It is difficult to argue that the additional cost of shipping to Ukraine is too high when prices are so high. It’s making people in the industry realize that there’s something more strategic at stake. “
Additional reports by Henry Foy in Moscow and Nathalie Thomas in Edinburgh
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