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Russia’s pipeline gas exports to Europe slumped to a new monthly record-low in January, falling by nearly 30% from December due to lower prices on the spot market, according to Reuters calculations.
Russia’s gas giant Gazprom has seen exports to Europe decline since the Russian invasion of Ukraine last year as Russia cut off gas supplies to a number of countries in Europe. Russia cut off supply to Poland, Bulgaria, and Finland in April and May, slashed gas deliveries via Nord Stream to Germany in June, then off Nord Stream supply in early September.
Russia still sends some gas via pipelines to Europe via one transit route through Ukraine, and via TurkStream.
This month, Gazprom has reduced pipeline gas transit flows to Europe via Ukraine on some days. Analysts have said that the lower pipeline flows were the result of lower demand for gas under long-term contracts, considering the milder weather in parts of Europe earlier in January and the fact that spot supply is currently cheaper.
Per Reuters calculations, which are based on daily data of flows from Russia via the transit route through Ukraine and via TurkStream, pipeline gas exports from Russia to Europe dropped to around some 1.8 billion cubic meters (bcm) in January, down from 2.5 bcm in December.
Gazprom hasn’t released January export data yet, but its exports to Europe via pipelines plunged to a post-Soviet low in 2022, according to data from the Russian firm calculated by Reuters. Last year’s Russian gas exports slumped by 45% year on year to reach 100.9 bcm in 2022.
Germany, Russia’s biggest customer of gas before the Russian invasion of Ukraine, doesn’t import any Russian gas via pipeline now. Norway became Germany’s single-largest natural gas supplier in 2022, overtaking Russia, as total German gas imports dropped by 12.3% compared to 2021.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.
Still, it is inevitable that Russian gas supplies will return to the EU if not via repaired Nord Stream 1 and Nord Stream 2, it will be via Turk Stream. Russia could eventually redirect natural gas supplies intended for the damaged Nord Stream pipelines to the Black Sea in order to create a European gas hub in Turkey.
The EU will have no alternative but to resume ordering Russian gas supplies sooner or later but not at the pre-Ukraine-conflict level. But if the EU is going to keep its chemical, food and heavy industries competitive, it will need some cheap gas. And there is no cheaper gas for Europe than Russia’s.
Dr Mamdouh G Salameh
International Oil Economist
Global Energy Expert