By Pavel Polityuk, Vladimir Soldatkin and Nina Chestney
(Reuters) – Russia instructed Austria it’s suspending gasoline deliveries from Saturday in a improvement that alerts a quick approaching finish of Moscow’s final remaining gasoline flows to Europe.
The suspension means Russia will now solely provide vital gasoline volumes to Hungary and Slovakia, in stark distinction with the many years of dominance that noticed it meet 40% of the EU’s gasoline wants earlier than Moscow’s 2022 invasion of Ukraine.
Austria was the primary western European nation to purchase Russian gasoline when the USSR signed a gasoline contract in 1968, simply months earlier than the Soviet invasion of Czechoslovakia.
This yr, the connection will finish following a contractual dispute between Russia’s Gazprom (MCX:) and Austria’s OMV.
In a discover revealed on the central European gasoline hub platform, OMV mentioned Gazprom instructed it provide would cease on Saturday.
Gazprom declined to remark.
Austria is without doubt one of the few European nations nonetheless depending on Russian gasoline as a lot of the remainder of the continent has diminished imports following the invasion of Ukraine.
OMV mentioned it has been getting ready for the eventual cut-off of Russian gasoline and it could nonetheless ship gasoline to its clients by importing by way of Germany, Italy and the Netherlands.
“We still expect this will exacerbate an energy crisis in Austria that has caused its gas demand to drop significantly, and has hit its manufacturing sector,” mentioned analysts at Eurointelligence.
“Austria’s economy is currently stuck in recession. Germany is sneezing, and Austria is catching the cold,” they added.
Germany was additionally closely reliant on Russian gasoline earlier than the conflict, however shipments ceased when the Nord Stream pipelines underneath the Baltic Sea have been blown up in 2022.
The notification of the top of provides to Austria got here because the Russian president, Vladimir Putin and Chancellor Olaf Scholz of Germany – Russia’s largest gasoline buyer till Moscow’s forces invaded Ukraine – held their first telephone dialog since December 2022.
Russia was prepared to take a look at power offers if Berlin was , the Kremlin mentioned.
“It was emphasized that Russia has always strictly fulfilled its treaty and contractual obligations in the energy sector and is ready for mutually beneficial cooperation if the German side shows interest in this,” the Kremlin mentioned.
Russia shipped about 15 bcm of gasoline by way of Ukraine in 2023 – representing solely 8% of peak Russian gasoline flows to Europe by way of varied routes in 2018-2019, in accordance with information compiled by Reuters.
In 2023, the transit route met 65% of gasoline demand in Austria and its jap neighbours Hungary and Slovakia, in accordance with the Worldwide Vitality Company. Ukraine has mentioned it does not plan to increase the transit settlement into 2025, which might have meant the lack of gasoline for Austria and Slovakia.
Hungary now not will get a lot gasoline by way of Ukraine and imports volumes by way of the TurkStream pipeline which runs alongside the mattress of the Black Sea. Slovakia nonetheless will get Russian gasoline by way of Ukraine.
EU power commissioner Kadri Simson instructed Reuters on the sidelines of a UN local weather convention in Azerbaijan that each one EU nations receiving gasoline by way of the Ukraine route have entry to different provide sources that might fill the hole.
“We have been very clear that alternative supply is available and there is no need for the continuation of Russian gas transiting via Ukraine to Europe,” Simson mentioned.
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