Gas prices: Putin ‘going to keep squeezing’ says expert

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The President of the European Commission told reporters on Tuesday EU leaders will discuss later this month the merits of a strategic EU gas reserve. Recent weeks have plunged the European Union into a full-blown energy crisis, triggered by dwindling supplies of natural gas and skyrocketing energy bills. Approximately 90 percent of the EU’s gas is imported from abroad, with Russia being a major stakeholder in the region.

However, new data published by Russia’s state-owned Gazprom reveals the Kremlin has turned the tap on its pipelines to Europe through Belarus.

Gas exports to Europe along these key pipelines fell by an astounding 70 percent, according to the official figures.

On September 26, Russia was pumping some 112 million cubic meters (mcm) of natural gas to Europe via Belarus.

By October 3, the exports fell to just 30mcm.

Exports have also fallen on the Russia-Belarus-Ukraine line, from about 110mcm to 85mcm within the same period.

The Kremlin has recently come under fire for playing politics with gas – claims that have been rebuked by Russia’s oligarchs.

Sergey Komlev, head of Contract Structuring and Price Formation Directorate at Gazprom Export, said: “Accusations that Gazprom is not supplying gas to Europe are absurd.”

Experts, however, fear the restricted flow of gas into Europe is going to hit consumers squarely in the pocket this winter.

Speaking this week in Estonia, Ursula von der Leyen said the world as a whole has been experiencing an increased demand for gas.

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But suppliers like Russia have so far been unable to match Europe’s demand and have instead been eyeing up the Asian markets for profit.

Ms von der Leyen said: “For gas, we are heavily dependent on imports – 90 percent of gas is being imported.

“Globally the economies are picking up so demand is rising, but the supply is not rising accordingly.

“We are very grateful that Norway is stepping up its production, but this does not seem to be the case in Russia.”

Early last month, Russia completed the controversial Nord Stream 2 pipeline to Germany, which bypasses both Poland and Ukraine in the Baltic Sea.

Experts warned the pipeline would undermine the national security of the East European states while increasing the EU’s reliance on Russia.

Similarly, a diplomatic row erupted between Hungary and Ukraine after the former struck a 15-year deal to import Russian gas through the Black Sea.

Ms von der Leyen has now said the European leadership will soon convene to find a possible solution to the bloc’s energy woes.

She said: “In the short term, we will discuss in the European Council, not only tonight, but in two weeks in the formal council how to deal with storage, a strategic reserve and we will have a look at the overall price composition of the electricity market because, if electricity prices are high it is because of the high gas prices, and we have to look at the possibility to decouple within the market, because we have much cheaper energy like renewables.”

The gas shortages have also affected the UK, forcing a number of small energy suppliers to go bust in September.

As of Wednesday, some 1.5 million customers were forced to switch suppliers as the wholesale cost of cast rose by 250 percent since the start of the year.

A total of nine companies went bust in September, including Symbio, Igloo and Enstroga.

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