On Saturday, Russian gas giant Gazprom maintained a consistent gas flow to Europe through Ukraine. However, supplies to the Austrian energy company OMV were interrupted shortly after Vienna announced that Russia had indicated it would reduce deliveries.
Before the Ukraine war, Russia was the largest single supplier of natural gas to Europe. However, it has since seen a significant decline in its European clientele as the European Union has made concerted efforts to lessen its reliance on Russian energy sources, particularly following the disruption of the Nord Stream gas pipeline to Germany in 2022.
The Urengoy-Pomary-Uzhgorod pipeline, a key Russian gas route to Europe dating back to the Soviet era, is set to cease operations at the end of this year. This decision comes as Kyiv has opted not to renew a five-year transit agreement that facilitates the flow of northern Siberian gas to Slovakia, the Czech Republic and Austria.
On Friday, Austria announced that Moscow had communicated its decision to halt gas supplies starting Saturday. This development follows an arbitration ruling favouring OMV, Austria’s largest energy supplier, regarding unmet Gazprom deliveries to its German subsidiary.
On Saturday, Austria’s energy regulator E-Control reported that Gazprom’s deliveries to OMV ceased at 6 a.m. local time (0500 GMT). The regulator also noted that prices and supplies to Austrian customers remained stable.
OMV is pursuing the recovery of 230 million euros in damages awarded to it during arbitration against Gazprom. The company plans to offset this claim against invoices related to gas deliveries to Austria, halting certain gas payments supplied through Ukraine.
Chancellor Olaf Scholz conversed with President Vladimir Putin on Friday, marking their first dialogue in almost two years. This development comes as European leaders anticipate insights from Donald Trump regarding potential resolutions to the most significant land conflict in Europe since World War Two.
The Kremlin reported that President Putin informed Chancellor Scholz that Russia has consistently met its contractual commitments regarding energy supplies and expressed readiness for mutually beneficial cooperation, contingent on the German side’s interest.
For over fifty years, leaders from the Soviet era through the post-Soviet period have focused on developing an energy sector that connects the Soviet Union, later Russia, with Germany, the largest economy in Europe. This initiative began following the discovery of significant gas deposits in Siberia in the years after World War II.
The ongoing conflict and subsequent explosions have severed that connection, inflicting significant damage on the economies of both nations.
At its height, Russia accounted for 35% of Europe’s gas supply; however, following the onset of the war in 2022, Gazprom has seen its market share diminish, with Norway, the United States, and Qatar stepping in to fill the void.
The Yamal-Europe pipeline, which runs through Belarus, has been shut down following a dispute. Meanwhile, Russia has pointed fingers at the United States and Britain regarding the unexplained explosions beneath the Baltic Sea that have led to the closure of the Nord Stream route.
Officials in Washington and London have refuted allegations that they were responsible for the destruction of the pipelines. According to a report by The Wall Street Journal, Ukrainian officials are believed to have orchestrated the attack. The government in Kyiv has refuted those claims.
The absence of Austria means that substantial Russian supplies will be directed to only two European nations: Hungary and Slovakia. In Hungary’s situation, these supplies will be delivered through a pipeline that predominantly traverses Turkey.
In 2023, Russia exported approximately 15 billion cubic metres of gas through Ukraine, representing around 8% of the peak gas flows to Europe recorded in 2018-2019, as reported by data gathered by Reuters.
According to the International Energy Agency, the Ukraine transit route fulfilled 65% of gas demand in Austria and its eastern neighbours, Hungary and Slovakia, in 2023.