Europe explosively increased imports of Russian gas

Alexey Belogoryev, Deputy Principal Director on Energy Studies of the Institute for Energy and Finance, commented to RIA Novosti on a significant increase in Russian gas imports to Europe.

Europe explosively increased imports of Russian gas in May compared to April, which was facilitated by several factors, among which the key ones are a better price and the risk of new consumer shutdowns, Alexey Belogoryev commented to RIA Novosti.

"Since May 1, there has indeed been an explosive growth in Russian pipeline gas supplies to the EU countries relative to very low April levels. For example, supplies to Finland, according to ENTSO-G, increased 4.8 times from April 30 to May 4. Gas pipeline deliveries "Yamal-Europe", which dropped to zero in the last days of April, returned to the level of early April in early May," the expert said.

According to Belogoryev, the growth in Russian gas supplies was the result of a combination of various factors. One of the key ones can be called the decrease in the contract prices for Gazprom's gas in May, which react to spot prices in Europe with a delay of one month. In April, the company's gas was sold on a price-pegged basis of March's highest quotations this year, while they were more attractive on the spot market. The May prices of "Gazprom" are based on these April quotations.

The second key factor is the preparation of a number of EU countries for the possibility of a complete halt in supplies from Russia due to their refusal to pay for gas in rubles.

The growth in supplies suggests, on the one hand, that buyers have little faith in the possibility of further price reductions, rather, on the contrary, they are afraid of their growth, and therefore it makes no economic sense to postpone gas injection into UGSFs. On the other hand, after an emergency meeting of EU energy ministers in early May, fears arose that the EU could come together in a tough confrontation with Gazprom regarding the transfer of gas payments to rubles, the expert adds.

“Therefore, it is quite natural to want to stock up on as much Russian gas as possible in the remaining two weeks. In other words, the observed growth is opportunistic and therefore unstable. Even if Russia and the EU manage to overcome the "ruble" crisis in May, supplies will most likely decrease in the summer," he concludes.