Russia’s gas supplies to Europe via the Nord Stream 1 pipeline will not resume in full until the “collective west” lifts sanctions against Moscow over its invasion of Ukraine, the Kremlin has said.
Dmitry Peskov, President Vladimir Putin’s spokesman, blamed EU, UK and Canadian sanctions for Russia’s failure to deliver gas through the key pipeline, which pumps gas to Germany from St Petersburg via the Baltic Sea.
Although Moscow continues to claim technical faults have caused the cuts in gas supplies, Peskov’s comments were the starkest demand yet by the Kremlin that it wants the EU to roll back its sanctions in exchange for Russia resuming full gas deliveries to the continent.
European leaders have said Russia’s technical issues are a ruse and have accused Moscow of “weaponising” its energy exports to retaliate against the western sanctions.
“The problems pumping gas came about because of the sanctions western countries introduced against our country and several companies,” Peskov was quoted as saying by the Interfax news agency. “There are no other reasons that could have caused this pumping problem.”
Gazprom, Russia’s state-run gas monopoly, said late on Friday it would halt gas supplies through Nord Stream 1 because of a technical fault, which it blamed on difficulties repairing German-made turbines in Canada.
The announcement came just hours after G7 nations announced efforts to introduce a price cap on Russian oil exports.
The plan is aimed at hampering Moscow’s efforts to fund its war machine through hydrocarbon sales. Russia has offset much of the economic hit from the sanctions thanks to its oil and gas revenues, which are benefiting from the sky-high energy prices since the conflict began.
Peskov said the sanctions made it impossible to service the turbines or receive guarantees they would be repaired. “It was these sanctions, that western governments introduced, which brought the situation to what we see now,” he said.
The German government and the EU have disputed the technical justification.
“It is important to recall that there is not just one gas pipeline from Russia to Europe,” said Tim McPhie, the European Commission’s energy spokesman on Monday. “If there was a technical problem which was impeding supplies via Nord Stream 1, there would be a possibility, if there was willingness, to deliver gas to Europe through other pipelines. That’s something we’re not seeing happening.”
The euro fell to a 20-year low against the dollar, dropping as much as 0.7 per cent to $0.988 in London trading on Monday, the first time markets have been open since Gazprom’s surprise announcements.
Russia is still supplying gas to Europe via Soviet-era pipelines through Ukraine that have remained open despite the invasion, as well as the South Stream pipeline via Turkey.
But supplies along the northern pipeline routes, including Nord Stream 1 and the pipelines through Ukraine, have fallen by more than 90 per cent between September last year and today, according to Refinitiv data.
Serhiy Makogon, chief executive of Ukraine’s gas transportation pipeline operator, said there were “no signs” Russia planned to compensate by pumping more natural gas through Ukraine.
He said Gazprom was currently pumping 41m cubic metres of gas daily through the Ukrainian route — just over half the maximum possible 77mcm under their contract.
Volumes on the southern TurkStream pipeline, which primarily supplies Turkey and countries in southern Europe, have not fallen in the same way but are less critical to supplying Europe’s largest economies.
Higher supplies from Norway, the UK, north Africa and increased imports of LNG have helped to an extent offset the loss of Russian supplies, which prior to the crisis made up about 40 per cent of European consumption. But the shortfall in September for countries reliant on the northern routes was still in the region of 20 per cent compared with last year.
Laurent Ruseckas, an analyst at S&P Global, said that Russian flows to Europe were now down more than 80 per cent since the start of 2021. Russia started gently squeezing supplies prior to the invasion of Ukraine, but has made much larger cuts in recent months after the west sanctioned Moscow over the war.
Josep Borrell, the EU’s chief diplomat, on Monday acknowledged that certain political factions in the bloc wanted the EU to drop its support for Ukraine, push Kyiv into a ceasefire and abandon sanctions against Russia to ease economic pressure on European countries. He said those views were “not representative” of the position adopted by member states.
Borrell spoke after protests in recent days in Czech Republic and Germany against the rising cost of living and comments from Czech politicians on Monday calling for a new attitude from the EU.
Borrell, speaking alongside Ukraine’s prime minister in Brussels, said there is “clear, complete, unwavering support of all [EU] governments to our position”.
Additional reporting by Roman Olearchyk in Kyiv