European Gas Supply Crisis from Russia Remains Unresolved Despite Approaching Midwinter

Putin Promised to Increase Gas Supply, but Supply Remains Low
Bloomberg Warns "Gas Prices May Surge Ahead of Winter"

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Kim Suhwan] Russian President Vladimir Putin announced on the 8th (local time) that he would increase the supply of natural gas to the European region, but analysis suggests that the supply shortage still shows no signs of being resolved.

According to Bloomberg on the 7th, Russia's state-owned energy company Gazprom reportedly did not participate in the auction to secure additional capacity for the major European gas pipelines passing through Ukraine and Poland.

Furthermore, as of the 8th, the ordered supply capacity of the Yamal-Europe gas pipeline passing through Poland was only about one-fifth of the usual supply volume, according to market research firm Gascade.

Currently, in the European market, natural gas prices have surged more than threefold compared to earlier this year due to increased gas demand, decreased gas reserves within Europe, and reduced wind power generation, leading to an energy crisis.

Especially given Europe's high dependence on Russian natural gas, European authorities have pointed out that the cause of the gas supply shortage is the Russian government's intentional control of supply volumes.

Earlier, Europe raised suspicions that Russia is deliberately reducing gas supply to pressure European authorities for the prompt approval of the recently completed Russia-Germany direct gas pipeline, Nord Stream 2.

In response, Russia stated that it is already providing gas supply at maximum capacity and plans to secure additional supply volumes.

On the 27th of last month, President Putin instructed the head of Gazprom, "Complete the supply of natural gas to Russia's underground storage by the 8th of next month, then begin work to increase the supply of natural gas to European gas storage facilities."

However, as of one day before the 8th, there were no signs of increased gas supply to Europe, raising concerns that prices could skyrocket ahead of the winter season.

Frank van Doorn, Head of Trading at Swedish power company Vattenfall, warned last week, "If additional gas supply is not made from the 8th, a sharp price surge will occur."

Bloomberg reported, "Concerns are emerging that gas prices will surge again if the additional gas supply promised by President Putin does not materialize," noting, "Especially with demand expected to increase ahead of winter, current gas reserves in Europe are significantly lower than usual."

This content was produced with the assistance of AI translation services.