Russia not deliberately choking gas supplies to West – Bloomberg

Recent slumps in Russian gas deliveries to Europe are not because of price manipulation for political gain, the New York based finance bible reported on Wednesday.

Earlier this week, the Yamal-Europe pipeline, which brings gas from Russia to Germany through Poland and Belarus, halted shipments. As European energy prices soared, some officials in the West accused Moscow of playing politics with the gas supply, in order to push Germany towards approval of the new Nord Stream 2 pipeline, which has been completed for months but has yet to be officially approved.

However, Bloomberg reported that anonymous sources familiar with the matter had confided that the real cause of the halt in gas transit was that Western buyers under long-term deals had already hit their contractual limits for 2021.

Typically, Gazprom and its customers agree to an arrangement whereby the company will supply a certain volume of gas at a pre-set rate, which this year was less than market price. Beyond that volume, energy buyers would need to pay the market rate, and when several of them reached their volume cap this week, they elected not to purchase more gas.

The Russian state-owned energy giant and its clients, including Uniper SE and RWE AG, confirmed that the company had fulfilled its agreements this year, with the Russian firm stating that it delivers gas to Europe “fully in compliance with the current contract obligations.”

Gas prices in Europe rose about 20% this week, sparking fears of a winter energy crisis, and leading to heated rhetoric surrounding energy security and the role of the Nord Stream 2 pipeline, which will bring Russian gas to Germany through the Baltic Sea, bypassing transit countries such as Ukraine and Poland.

The controversial project, which was fully constructed in September, has met with staunch opposition from Kiev, Warsaw, and Washington, and Ukrainian officials have taken credit for working to delay its certification. However, German Chancellor Olaf Scholz has insisted that it should not be used as political leverage against Moscow, saying, “The German authorities will decide this completely independent of politics. The process is moving along.”

At a press conference on Thursday, Russian President Vladimir Putin accused Western leaders of lying to make Moscow out to be responsible for the rising gas prices. “Gazprom is delivering the volume requested by its partners in full, in accordance with existing contracts,” he said.

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