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By Vladimir Soldatkin and Man Faulconbridge
MOSCOW (Reuters) -Russia halted fuel provides to Austria on Saturday in a dispute over funds however was nonetheless pumping regular volumes to Europe by way of Ukraine after remaining patrons requested for extra fuel.
Russia, which earlier than the Ukraine battle was the most important single provider of to Europe, has misplaced nearly all of its European clients because the EU tries to scale back its dependence and after the Nord Stream pipeline to Germany was blown up in 2022.
Now one of many final predominant Russian fuel routes to Europe – the Soviet-era Urengoy-Pomary-Uzhgorod pipeline by way of Ukraine – is because of shut on the finish of this 12 months, as Kyiv doesn’t wish to prolong a five-year transit settlement which brings northern Siberian fuel to Slovakia, the Czech Republic and Austria.
Austria mentioned on Friday that Moscow had knowledgeable it that the fuel can be shut off following an arbitration award to OMV, Austria’s largest vitality provider, over unfulfilled provides to its German unit by Russia’s state agency Gazprom (MCX:).
On Saturday, Austria’s vitality regulator E-Management mentioned Gazprom’s deliveries to OMV had stopped at 6 a.m. (0500 GMT), including that costs and provides to Austrian clients have been regular.
OMV is in search of to get better the 230 million euro ($242 million) damages, awarded throughout arbitration, from Gazprom by offsetting the declare towards invoices for deliveries to Austria – primarily stopping some funds for fuel provided by way of Ukraine.
Gazprom declined to touch upon the suspension of flows to Austria, however the Russian firm mentioned it could ship 42.4 million cubic metres of fuel to Europe by way of Ukraine on Saturday, the identical quantity as on Friday and through each different day in latest months.
Slovak state-owned agency SPP mentioned it was nonetheless receiving fuel from Russia and added others have been shopping for extra.
“The state of affairs when a big client stopped taking fuel from the east, however the identical quantity flows by way of the territory of Ukraine, reveals that there’s nonetheless nice curiosity on this fuel in Europe,” SPP mentioned in an announcement, with out naming the opposite patrons.
OMV normally accounts for round 40% of Russian fuel flows by way of Ukraine, or some 17 mcm per day.
Austrian grid operator AGGM mentioned it was not at present substituting imports from Germany or Italy. Austria mentioned earlier it had plentiful shares to cowl the shortfall.
GAS POLITICS
Chancellor Olaf Scholz spoke to President Vladimir Putin on Friday for the primary time in practically two years, as European leaders wait to listen to Donald Trump’s concepts on ending the most important land battle in Europe since World Struggle Two.
In accordance with the Kremlin, Putin instructed Scholz that Russia had at all times fulfilled its contractual obligations for vitality provides and was “prepared for mutually helpful cooperation if the German facet reveals curiosity on this”.
Soviet and post-Soviet leaders spent half a century from the invention of main Siberian fuel deposits within the post-WW2 years build up an vitality enterprise which linked the Soviet Union, then Russia, and Germany, by far Europe’s largest financial system.
Struggle, and explosions, have destroyed that hyperlink, damaging the economies of each nations.
At its peak, Russia was supplying 35% of Europe’s fuel however because the battle began in 2022 Gazprom has misplaced market share to Norway, america and Qatar.
The Yamal-Europe pipeline by way of Belarus was closed after a dispute, whereas Russia blamed america and Britain for the explosions underneath the Baltic Sea that closed the Nord Stream route.
Washington and London have denied they blew up the pipelines. The Wall Road Journal has reported Ukrainian officers have been behind the assault. Kyiv has denied that.
With out Austria, important Russian provides will solely go to 2 European nations, Hungary and Slovakia, in Hungary’s case by way of a pipeline working principally by way of Turkey.
Russia shipped some 15 billion cubic metres of fuel by way of Ukraine in 2023, about 8% of peak Russian fuel flows to Europe by way of numerous routes in 2018-2019, in response to knowledge compiled by Reuters.
In 2023, the Ukraine transit route met 65% of fuel demand in Austria and its japanese neighbours Hungary and Slovakia, in response to the Worldwide Vitality Company.
($1 = 0.9487 euros)
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