Image Source: DW
Italy is the latest European country to announce significant Russian gas supply cuts. After facing deficits for two days, Eni said it would only receive half of the 63 million cubic meters per day it had sought from Gazprom on Friday.
Germany has accused Gazprom of inflating energy costs by drastically cutting supply. The Nord Stream pipeline, according to Gazprom, is at fault.
Russia remains Europe’s primary supplier of natural gas; it also provides 27% of the EU’s imported oil, for which it pays Russia roughly €400 billion ($430 billion; £341 billion) per year.
In response to Vladimir Putin’s invasion of Ukraine, the EU has taken steps to wean itself off Russian fossil resources, with most oil imports banned by 2022. In addition, it has pledged to cut Russian gas imports by two-thirds in a year, but further steps, such as an outright ban, have been difficult to agree on.
Member states have been instructed to store gas during the hotter summer months in anticipation of an increased need for fuel in the winter, but Russia’s recent supply cuts have raised fears that the continent would be unable to meet demand. If Russia continues to cut supplies, two government sources told Reuters that Italy might announce a “heightened state of alert” on gas next week.
Rationing gas to chosen industrial customers under current contracts, ramping up production at coal power plants and requesting gas imports from other providers would all be implemented as a result of such a move.
On Friday, Slovakia, like Italy, reported getting less than half of normal amounts through the Nord Stream 1 gas pipeline, which runs from Russia to Germany over the Baltic Sea. Meanwhile, France has reported that it has not received Russian gas through Germany since June 15 but that it is getting supply from other sources.
Germany has accused Gazprom of aiming to drive up energy costs by drastically cutting supplies, but the energy company claims that this is due to the delayed return of equipment serviced in Canada by Siemens Energy. Russia’s gas supply has also dropped dramatically in Austria. This was not planned, according to the Kremlin.
After refusing to pay in Russian roubles, Russia’s gas supply to Poland, Bulgaria, Finland, Denmark, and the Netherlands has already been halted. Following the advent of Western sanctions, Russia’s payment demand was regarded as an attempt to bolster the rouble. As foreign exchange demand rises, rouble demand is expected to climb, pushing the currency’s value upward.
Liquefied natural gas imports, with a substantial portion coming from the United States, have boosted gas storage levels across Europe this year. According to ING Research, stores across the EU are currently 52% full, slightly lower than the five-year average but higher than the 43% witnessed at this time last year.
“However, a long outage will raise doubts about the EU’s ability to develop enough storage in time for the next heating season,” they warned.
Between the 11th and the 21st of July, Nord Stream 1 will undergo yearly maintenance, halting all gas shipments.