The Russian gas has not disappeared from market supplies to the European Union almost two and a half years after the outbreak war in Ukraine and concrete data speak for themselves.
Reuters: Russian gas flow to Europe increases. Overtaking the USA
Those calculated by Reuters on the flow of gas via pipe and Russian liquefied natural gas to the countries of the European Union show that in May there was a significant rebound in Gazprom’s supplies to Europe and, even, that Russian gas has temporarily overtaken American gas, becoming the second source of supply of the Old Continent after Norway.
Gazprom’s exports in May rose 7.3% from April and 39% year-on-year. Reuters also cited volumetric data underlining that “average daily pipeline exports to Europe increased to 89.5 million cubic meters (mcm) last month from 83.4 million mcm in April and 64.5 million mcm in May 2023.” Added to this is the export via liquefied natural gas which was developed by Russia before the war in Ukraine precisely in response to the strategy American of conquest of the Old Continent market.
More Russian LNG in Europe after the invasion of Ukraine
The European Council of Foreign Relations recalls that “Russia supplies 16% of the EU’s LNG imports, with Spain, France and Belgium among the main buyers”. And although “at 8 billion euros last year, LNG exports to Europe represent only a fraction of Russian hydrocarbon revenues” the political value of holding a market share is far from simply symbolic. Russia rose to a 15% share of the European gas market in May, surpassing the US 14% and showing how difficult it is to operate a complete decoupling energy from a great power like Moscow.
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Paradox of paradoxes, after the start of the European diversification strategy and the increase in the push for LNG, the share of blue gold transported by ship by Russian companies increased in both 2022 and 2023. The reasons? The Russian liquefied natural gas market was only incidentally affected by the sanctions and, at the same time, the European push for regasifiers required entry into a market different from that of piped gas. If in the latter the contracts are negotiated over long supply periods, in the LNG the cargoes are bought and sold in real timeand Russia uses its proximity to Europe to place them.
Russian gas is here to stay
Finally, the supply of liquefied natural gas mainly affects those countries that have never had gas infrastructure links with Moscow, and it is no coincidence that the main market share belongs to Belgium, France and Spain. Moral of the story, da 14.6 billion cubic meters per year in 2021 Russian LNG exports to Europe were of 20 billion cubic meters in both 2022 and 2023an increase of almost 50%.
Finally, Russia continued to increase, albeit in a limited way, gas transits to Europe via Ukraine. The invaded country is buying American LNG, but at the same time it is not stopping the flows of infrastructure starting from Russia and crossing its territories. S&P Global estimates a passage of 1.31 billion cubic meters of gas in May, 39% of overall capacity, up 5% month over month. There are states like Austria and Hungary which depend on this gas for supplies, and contribute to maintaining at considerable levels a Russian share in the European gas market which has certainly been reduced but not eliminated. And that will be difficult eliminate completely. Assuming that there is real political will in this regard in Europe.
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