Europe's gas supply crisis worsens as Russia imposes sanctions
A pressure gauge at a Ukrainian gas compressor station. /Reuters/Konstantin Chernichkin

A pressure gauge at a Ukrainian gas compressor station. /Reuters/Konstantin Chernichkin

Pressure on Europe to secure alternative gas supplies increased on Thursday as Moscow imposed sanctions on European subsidiaries of state-owned Gazprom a day after Ukraine stopped a significant gas transit route, pushing prices higher. 

Russia imposed sanctions late Wednesday, mainly on Gazprom's European subsidiaries, including Gazprom Germania, an energy trading, storage, and transmission business Germany placed under trusteeship last month to secure supplies.  


What is Nato and why is Russia worried?

The legend of the Ghost of Kyiv

Who owns the Arctic?

It also placed sanctions on the owner of the Polish part of the Yamal-Europe pipeline that carries Russian gas to Europe. 

Kremlin spokesperson Dmitry Peskov said there can be no relations with the companies affected, nor can they take part in supplying Russian gas. 

The affected entities, listed on a Russian government website, are primarily based in countries that have imposed sanctions on Russia in response to its invasion of Ukraine, most of them members of the European Union. 

Germany, Russia's top client in Europe, said some subsidiaries of Gazprom Germania were receiving no gas because of the sanctions but are seeking alternatives. 

"Gazprom and its subsidiaries are affected," German Economy Minister Robert Habeck told the Bundestag lower house. "This means some of the subsidiaries are getting no more gas from Russia. But the market is offering alternatives." 

Gas transit politics 

Gazprom said it would no longer be able to export gas through Poland via the Yamal-Europe pipeline after sanctions against EuRoPol Gaz, which owns the Polish section. 

The pipeline connects Russian gas fields in the Yamal Peninsula and Western Siberia with Poland and Germany, through Belarus, and has a 33 billion cubic meter (bcm) capacity, around a sixth of Russian gas exports to Europe. 

However, gas has been flowing eastward through the pipeline from Germany to Poland for some weeks, enabling Poland - which was cut off from Russian supplies along with Bulgaria last month for refusing to comply with a new payment mechanism - to build stocks. 

Germany's Habeck said Russia's measures seemed designed to drive up prices, but the expected 3 percent drop in Russian gas deliveries could be compensated for on the market, albeit at a higher cost.  

Moscow's sanctions came just a day after Ukraine halted a gas transit route, blaming interference by occupying Russian forces, the first time exports via Ukraine have been disrupted since the invasion. 

Draft documents today showed the European Commission is looking to speed up the EU's switch away from reliance on Russian fossil fuels by increasing investment in renewables and alternative sources of gas.

Source(s): Reuters

Search Trends