Russia will suspend gas supplies to European countries, including Austria.
Moscow/London/Vienna Russia told Austria on Friday that it would suspend gas deliveries through Ukraine on Saturday. After this, there has been a great stir in all the countries of Europe. It is an event that signals the imminent end of the last gas flows from Moscow to Europe. Let us tell you that this is the oldest gas export route from Russia to Europe. That runs through Ukraine since the Soviet era. But this gas pipeline that goes to Europe through Ukraine will also be closed at the end of this year. Because of this, the whole of Europe may have to face gas supply problems.
Ukraine has said it will not extend a transit deal with Russian state-owned company Gazprom (GAZP.MM). The Russian gas producer will suspend natural gas supplies to OMV through Ukraine. Once the existing five-year agreement between Russia and Ukraine expires, Russian gas supplies to Europe through Ukraine could stop completely from January 1, 2025. Because kyiv refused to negotiate new transit conditions with Moscow during the war. If Russian gas transit through Ukraine stops completely, who will be most affected?
There will be panic in Europe
Russian gas supplies to Europe through Ukraine are relatively small. Russia shipped around 15 billion cubic meters (bcm) of gas through Ukraine in 2023, which is only 8% less than the total Russian gas that flowed through various routes to Europe in 2018-2019. Russia has spent half a century increasing its share of the European gas market. Which once reached 35% at its peak. But Moscow lost share to rivals such as Norway, the United States and Qatar after its invasion of Ukraine in 2022, prompting the EU to reduce its dependence on Russian gas.
Gas prices soared in Europe
EU gas prices will reach record levels in 2022 after cuts in Russian gas supplies. The Soviet-era Urengoy-Pomory-Uzhgorod gas pipeline transports gas from Siberia through the city of Sudza in Russia’s Kursk region, now under the control of the Ukrainian military forces. It then passes through Ukraine to Slovakia. In Slovakia, the gas pipeline is divided into branches leading to the Czech Republic and Austria. Austria still sources most of its gas through Ukraine, while Russia accounts for around two-thirds of Hungary’s gas imports.
Slovakia receives about 3 bcm from energy giant Gazprom (GAZP.MM) a year, about two-thirds of its needs.
How far does gas go from Russia?
The Czech Republic almost completely stopped importing gas from the east last year, but plans to start importing gas from Russia in 2024. Most other Russian gas routes to Europe are closed, including Yamal-Europe via Belarus and Nord Stream under the Baltic. The only other operational Russian gas pipeline routes to Europe are Blue Stream and TurkStream under the Black Sea to Türkiye. Türkiye ships some volumes of Russian gas to Europe, including Hungary.
Many European countries still want gas from Russia
Is the Ukrainian gas supply route still working? While the rest of the Russian gas lines are limited. This issue remains a dilemma for the EU. Several EU members, including France and Germany, have said they will no longer buy Russian gas, but the stance of Slovakia, Hungary and Austria, which have close ties to Moscow, challenges the EU’s overall approach. Countries that still receive Russian gas argue that it is the cheapest fuel and also blame neighboring EU countries for charging high transit fees for alternative supplies. According to Reuters calculations, based on an average gas price of $200 per 1,000 cubic meters, Russia earns more than $3 billion from sales through Ukraine. (Reuters)
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