December 9, 2022

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Russia threatens to restrict gas flows going to western Europe via Ukraine

2 min read

Russia has threatened to restrict gas supplies to western Europe through the only pipeline still connecting the regions, warning that it could lower flows through Ukraine from next week.

Gazprom, the state-backed Russian gas pipeline monopoly, accused Ukraine on Tuesday of taking gas meant for Moldova from lines running through the country, and warned that it may reduce supplies from November 28.

While the Russian flows going to Moldova only make up a small percentage of those transiting Ukraine, any threat to the last remaining pipeline route to western Europe is likely to unsettle energy markets as winter starts.

Any loss of supplies through Ukraine could still unsettle energy markets, however, as governments and traders believe Europe needs more than the gas it holds in storage to meet heating and industrial demand through the winter.

Tom Marzec-Manser of energy consultancy ICIS said that while Gazprom’s threat was, for now, only to Russian volumes going to Moldova through Ukraine, traders were likely to worry it could be the precursor to further cuts.

Large-scale Russian supply reductions have often originated with threats to reduce volumes by a small amount initially, while the accusation of Ukraine diverting supplies echoes the gas crisis of 2009, when Russia ultimately slashed flows to Europe in response.

“The industry has long feared that Russia could threaten the remaining flows to western Europe via Ukraine this winter,” Marzec-Manser said. “We’ve seen in the past that small cuts in supply can become bigger cuts very quickly, and Europe is not out of the woods yet in terms of gas supplies during the coldest months.”

Russia has been accused of “weaponising” its gas supplies to Europe in retaliation for western support for Ukraine. Since Moscow’s full-scale invasion in February it has closed all but one of the pipelines going to western Europe, including those bypassing Ukraine such as Nord Stream 1. Supplies have been slashed to…

2022-11-22 11:32:43

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