| 21 April 2024, Sunday |

Russia’s Putin says Europe only has itself to blame for surging gas prices

According to Russian President Vladimir Putin, the European Union can only blame its own policies for record gas prices because some of its members resell cheap Russian gas at significantly higher costs within the union.

Putin also urged the EU to approve a new Russian gas pipeline, the Nord Stream 2, to alleviate the pricing squeeze.
On Tuesday, Europe’s benchmark gas price reached a new high, having risen 800 percent since the beginning of the year.

The United States, as well as other east European countries, are opposed to Nord Stream 2, claiming that the pipeline will increase the EU’s reliance on Russian gas, which currently supplies 35% of the bloc’s gas needs.

The pipeline between Russia and Germany, which was completed in September, is still awaiting regulatory clearance from Berlin and Brussels.

“The extra gas supply on the European gas market would undoubtedly cut the price on an exchange, on the spot (market),” Putin said at a combined meeting of the State Council and a council for research and education, according to news agency RIA.

Adding to the pressure, the Yamal-Europe pipeline, which normally transports Russian gas to Western Europe, was running in reverse for the fourth day on Friday, pumping fuel from Germany to Poland, according to data from German network operator Gascade.

The Russian gas giant Gazprom has not reserved gas transit capacity for exports via the Yamal-Europe pipeline for December 25, according to auction results.

After Poland and Russia decided not to extend their long-term transit agreement last year, Gazprom normally books capacity via the route on a short-term basis.

Putin said that Poland had “sidelined” Russia from controlling the Yamal-Europe pipeline, which has been transporting gas eastward in reverse mode. The pipeline connects Russia to Belarus, then to Poland and Germany.

“This does not enhance Russian gas quantities on the European market, hence the price is rising,” Putin remarked of the reverse flows, according to Interfax.

On Thursday, Putin stated that Germany was reselling Russian gas to Poland and Ukraine rather than easing a hot market.

In Ukraine, another transit route for Russian gas to Europe, the director of the state gas transmission company stated that Gazprom has cut daily gas transit via Ukrainian territory from 109 mcm to 87.7 mcm.

“The reduction in gas supply to the European Union at a time when prices have surpassed $2,000 implies that these are simply political measures, aimed at putting pressure on the EU to build Nord Stream 2 on conditions acceptable to the Russian Federation,” Sergiy Makogon said on Facebook.

On Tuesday, the benchmark European gas price surpassed 2,200 euros ($2,495) per 1,000 cubic meters.

Because of supply difficulties, Europe, according to Makogon, has set a record for withdrawing gas from storage.

Russia has frequently denied playing politics with gas, claiming that it is honoring all of its contractual obligations. Companies with supply agreements have also said that their commitments have been fulfilled.

  • Reuters