Russia has exacerbated a shortage of European natural gas supplies that has driven prices to a 13-year high by quietly limiting top-up sales to customers, according to executives and analysts. Pipeline exports of natural gas from Russia’s state-backed monopoly Gazprom to continental Europe have dropped roughly one-fifth in 2021 on pre-pandemic levels despite a sharp rebound in demand and low stockpiles of the important fuel. The imbalance has helped send prices in Europe to the highest levels since 2008, increasing energy costs for homes and businesses.
The rise in prices comes during a period of volatile relations between Russia and the West. On Wednesday, Russia said its forces fired warning shots at a British destroyer off the coast of Crimea, claims the UK denied. At the same time, Germany and France sought this week to cool tensions with Russia, proposing a new EU plan for closer engagement with Moscow.
Energy industry executives and analysts said that while Gazprom was meeting its long-term contractual obligations, its reluctance to boost supplies to Europe through more immediate measures such as spot market sales was putting pressure on the market. “Gazprom is just trying to maximise its profits at a time when spot prices are high, gas storage is empty and LNG demand in Asia is strong,” said one executive at a German energy company. “They’re just being opportunistic.” Gazprom said in a statement that it “supplies gas precisely in line with consumers’ requests”.