Russia cuts more natural gas exports to Europe amid Ukraine war

Russia reduced natural gas flows to Europe on Friday, cutting off half of the flow to Italy and Slovakia, and completely to France. The reduction was part of countries’ efforts to lessen their dependence upon Russian supplies in the midst of the conflict in Ukraine.

It marks the third consecutive day of significant cuts to the fuel that powers industry in Europe and generates electricity. This also includes Germany and Austria. It has increased already-high energy costs, which are driving record inflation within the European Union.

Russia claims that the cutting of Nord Stream 1’s key pipeline to Germany and France was caused by a technical issue. Canada, however, blames Western sanctions for causing the problem.

Leaders in Germany and Italy called the reductions a political move, and it’s escalated the energy tensions in Europe, following Russia’s previous cutoff of natural gas to Poland, Bulgaria, Finland, the Netherlands and Denmark.

Volodymyr Zelenskyy, President of Ukraine said Friday that the reductions are “blackmail (against) both individual countries and Europe as a whole.”

Russia told Slovakia’s state-controlled gas company SPP that it would reduce deliveries to the country by 50 per cent, SPP director Richard Prokypcak told a conference in Bratislava. The reason for this reduction has not been explained.

Russian state-owned energy giant Gazprom told Italian gas company Eni on the same day that it would supply only 50 per cent of the amount of gas requested for Friday, reducing the flow to one of Europe’s biggest importers of Russian gas for a third day.

Gazprom reduced by 15 per cent Italy’s requested delivery on Wednesday. According to the ANSA news agency, the Russian company reduced it by 15% on Wednesday. Italy gets 40% of its gas from Russia. However, it has been looking for alternative sources in countries like Algeria.

France is not receiving any natural gas from Russia anymore. The French gas network operator GRTGaz saidAfter dropping by 60% in the first five months, Russian supplies via Germany were stopped Wednesday.

Operator saidFriday’s news that, despite the Russian supply halt, there are no expected disruptions to gas supplies this summer. Partly due to more shipments via Spain, France normally gets about 17 per cent of its natural gas from Russia, but overall gas is a relatively small part of France’s energy mix, at about 16 per cent.

The cut in supplies to France was “a consequence of the already-known reduction” of gas supplies via the Nord Stream 1 pipeline, German Economy Ministry spokesman Stephan Gabriel Haufe said. He didn’t have further details of specific reasons for the cut.

Russia has saidCanadian sanctions prevented Siemens Energy from delivering equipment to Canada that had been sent to be repaired by its German partner Siemens Energy. The German government said maintenance shouldn’t have been an issue until the fall and the Russian decision was meant sow uncertainty and push up prices.

“Both we and Germany and others maintain it’s a lie, there’s a political use of gas” by Russia, Italian Premier Mario Draghi said in Ukraine’s capital, Kyiv, on Thursday.

In Slovakia, Prokypcak downplayed the impact of the cuts despite “facing a real risk (the supplies from Russia) will halt completely,” the CTK news agency quoted him as saying.

The previous days saw cuts of 10% on Wednesday, and 34% on Thursday. To diversify its supply, Slovakia recently signed a deal to receive gas from Norway through Germany.

Economy Minister Richard Sulik said the new deals would reduce his country’s dependence on Russian gas by 65 per cent. Slovakia used to get 85 percent of its gas from Russia before the deals.

Slovakia has about one-third of the country’s one-year consumption in its gas storages and was planning to have enough gas for the winter season stored by July 10.

OMV, Austrian oil-and-gas company said Thursday that Gazprom had informed it of a reduction in supplies but didn’t specify by how much.

The European Union is trying reduce Russia’s gas imports by at least two-thirds by the end this year. To make up the difference, it has started using liquid gas imported from the United States to fill that gap. But an explosion and fire at a key U.S. export facility in Freeport, Texas, took one-fifth of the country’s gas export capacity offline and underlined concerns about the fragility of Europe’s gas supplies.

Short-term natural gas prices were higher Friday at 126 euros per megawatt in month-ahead futures. This is an increase of approximately 50% from Monday.

Gas prices fell with the end to the winter heating season, providing some relief for European utilities who were scrambling underground storage to ensure they had enough gas to get through the next winter.