Gazprom began to sharply reduce gas supplies to the EU through Ukraine

Gazprom kicked off 2023 with a sharp “turn of the valve” on a pipeline pumping gas to Europe via Ukraine.

Deliveries to European countries via the Ukrainian GTS fell by almost 20% in the first days of the new year, to 35.5 million cubic meters per day on Friday, January 6.

At the end of last year, Gazprom was pumping 42.4 million cubic meters through Ukraine daily, about a third of the volume included in the transit contract concluded in 2019. Deliveries remained at this level until Thursday, January 5, when their volume dropped to 38.8 million cubic meters per day, and then by another 3.3 million cubic meters.

At the end of last year, Gazprom exported about 85 billion cubic meters of gas to Europe and Turkey, the smallest volume since the late 1980s. The total export of gas to non-CIS countries amounted to 101 billion cubic meters and almost halved compared to 2021.

Gas production by Gazprom fell by 20%, a record for the entire modern history of the Russian gas industry, and its total volume – 412 billion cubic meters – was the lowest in the last 14 years.

In 2023, Russian gas supplies to Europe may hit the “bottom” since the times of Leonid Brezhnev and Yuri Andropov – 60 billion cubic meters, according to the forecast of the International Energy Agency.

To China, according to the Power of Siberia pipeline operation plan, Gazprom is to pump 22 billion cubic meters, one-seventh of its former exports to Europe (more than 150 billion cubic meters).

Although the Russian authorities predicted a gas crisis for the European Union, and the Deputy Head of the Security Council, Dmitry Medvedev, twice predicted a rise in prices to $ 5,000 per thousand cubic meters, from the peaks shown in November, the price of gas in the EU collapsed by 80%.

Thanks to warm weather and a record inflow of LNG (20 billion cubic meters in December), in the first days of January, gas futures on the ICE exchange in London fell below $ 700 per thousand cubic meters, which the market has not seen since the beginning of the war. At 14:59 Moscow time on January 6, contracts with delivery in February are traded at $728 per thousand cubic meters.

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