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Tsvetana Paraskova

Tsvetana Paraskova

Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. 

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IEA Says Russia Is To Blame For Europe’s Gas Crisis

  • IEA Chief Birol: “We see strong elements of ‘artificial tightness’ in European gas markets, which appears to be due to the behaviour of Russia’s state-controlled gas supplier,”
  • Unlike other pipeline suppliers to Europe—including Algeria, Azerbaijan, and Norway—Russia actually cut its exports to Europe by 25 percent in the last quarter of 2021

Low natural gas deliveries from Russia appear to have artificially tightened the European gas market, the International Energy Agency’s Executive Director Fatih Birol said on Thursday, adding that energy systems “face significant risks” by relying too much one on supplier for a key energy source.

“We see strong elements of ‘artificial tightness’ in European gas markets, which appears to be due to the behaviour of Russia’s state-controlled gas supplier,” Birol wrote in a LinkedIn post in one of the strongest finger-pointing in recent months about who is responsible for the record-high natural gas prices in Europe and skyrocketing energy bills for households.

Unlike other pipeline suppliers to Europe—including Algeria, Azerbaijan, and Norway—Russia actually cut its exports to Europe by 25 percent in the last quarter of 2021 compared to the same period of 2020, and by 22 percent versus the fourth quarter of 2019, he added.

“And this is despite the exceptionally high market prices for natural gas that we have seen in recent months,” Birol wrote.

According to estimates from the IEA, Russia could raise its gas deliveries to Europe by at least one-third, or over 3 billion cubic meters per month, which would be nearly 10 percent of the European Union’s average monthly gas consumption, the head of the agency said.

“In my view, today’s situation underlines the fact that energy systems face significant risks if they rely too much on one supplier for a key element. Today, it is natural gas; tomorrow, it could be something else, such as lithium. This is why I’m urging governments to act now to tackle today’s energy security challenges and those of the future,” Birol wrote.

Meanwhile, the EU’s Competition Commissioner, Margrethe Vestager, said on Thursday that she was “eagerly awaiting” Gazprom’s response to EU questions about insufficient deliveries.

Low Russian supply and cold weather have been the two main drivers of rising gas prices in Europe in recent weeks when Russia’s deliveries via Poland and Ukraine have been lower than historical norms.

By Tsvetana Paraskova for Oilprice.com

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  • Mamdouh Salameh on January 13 2022 said:
    In his efforts to keep himself in the limelight and also ingratiate himself with the United States and the EU, the Chief of the IEA Fatih Birol leaves no occasion without pontificating on one energy issue or another. However, every time he opens his mouth he makes a gaffe or ends up expressing the wrong information.

    In his latest pontification, he is blaming Russia for Europe’s energy crisis by claiming that it cut its gas exports to Europe by 25% when the EU Secretariat has itself acknowledged that the Russian gas giant Gazprom has fulfilled all its gas supply contracts with the EU.

    What caused Europe’s energy crisis is the hapless EU politicizing energy and deliberately delaying the certification of Nord Stream 2 gas pipeline under intense pressure from the United States as well as misreading the global gas market and mismanaging their own gas supplies for the winter.

    In an earlier occasion the IEA Chief put his foot in his mouth when he claimed that renewables weren’t responsible for Europe’s energy crisis when everybody knows full well that it was the EU’s hasty acceleration of the energy transition at the expense of fossil fuels that was behind the energy crisis.

    The list of Mr Birol gaffes is endless. In 2021 he came up with what the Saudi Energy Minister Prince Abdulaziz bin Salman described as the la-la-land zero-emissions 2050 roadmap in which he called for the immediate stop to any new investments in oil and gas starting 2021. However, when OPEC+ rejected calls by US President Biden to increase its oil production to help reduce rising gasoline prices in the United States, he immediately forgot about his roadmap and called on OPEC+ to raise production. In his quest to ingratiate himself with the Americans, Mr Birol was even prepared to contradict himself.

    In 2018 at the Annual World Economic Forum at Davos in Switzerland, Mr Birol hyped so much about the potential and production of US shale oil that the then Saudi Energy Minister Khalid Al Faleh openly admonished him for his continuous hype about shale oil.

    But his biggest gaffe so far was in 2019 when he claimed that by 2025 US shale oil production will be bigger than the combined production of Saudi Arabia and Russia.

    Neither American or Qatari or Australian LNG nor Norway’s and Netherlands’ gas supplies to the EU are sufficient to quench the thirst of the EU for natural gas. Only Russian reliable and plentiful gas supplies can.

    For his information, Russia isn’t inclined to ship any additional supplies to the EU without the certification of Nord Stream 2 and the signing of long-term supply contracts with the Russian gas giant Gazprom. Nor will it increase supplies via Ukraine. Moreover, Russia has a choice. President Putin has other markets for his gas and therefore he isn’t dependent on the gas export revenue from the EU.

    Dr Mamdouh G Salameh
    International Oil Economist
    Visiting Professor of Energy Economics at ESCP Europe Business School, London
  • Steven Conn on January 14 2022 said:
    IEA is a branch of US government. What else are they going to say?
    What we do know is that
    1. US reduced its LNG supplies to EU in 2021.
    2. Wind generation declined while reserve energy infrastructure from coal was not maintained enough to ensure stable supplies and prices.
    3. EU has worked hard to obstruct Nord Stream II and OPAL pipelines. How are they seeking to limit these and yet rhetorically wishing for more gas deliveries from Russia?
    4. Gazprom has fulfilled its contracts and has provided gas at much lower prices than the vaunted EU spot market in Western Europe.

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