Russia's Gazprom Cuts Gas Deliveries to Austria

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Facts

  • Russian gas flows to Austria were reduced by up to 20 percent over the weekend, according to daily reports from the Austrian Gas Grid Management, after Gazprom decided to halt supplies to OMV.[1][2]
  • On Friday, an OMV statement revealed Gazprom had informed them that deliveries of natural gas under its Austrian Supply Contract would be suspended the next morning, and eventually reduced to zero.[3]
  • This comes after OMV won an arbitration award against Gazprom over its irregular German gas supplies and threatened to impound some gas to recover damages amounting to €230M plus interests and costs.[2][4]
  • Austria was reportedly planning to stop importing natural gas from Russia by 2027 and to scrap a take-or-pay contract between Gazprom and OMV, which was extended until 2040 six years ago.[5][6]
  • Russia cut most of its gas supplies to Europe in 2022 after the start of the war in Ukraine, prompting its former partners to look for alternative supplies at higher prices. Last December, Austria got as much as 98% of its natural gas from Russia.[7]
  • Gas prices in Europe jumped over €45/MWh for the first time in a year last week amid uncertainty over gas flows from Russia, as a still valid transit agreement between Moscow and Kyiv is set to expire later next month.[8][9]

Sources: [1]Kronen, [2]Reuters, [3]Gashub, [4]OMV, [5]Euractiv, [6]TASS, [7]Associated Press, [8]Guardian and [9]The Telegraph.

Narratives

  • Establishment-critical narrative, as provided by Sputnik International. One of the last countries in Europe still to rely on cheap pipeline-delivered gas from Russia, Austria has decided to bow to EU pressure and destroy its decades-long relationship with Gazprom. Now, its people will have to pay higher prices to get access to energy as winter approaches. This is what bad policy looks like.
  • Pro-establishment narrative, as provided by Euronews. It's dead clear that the Kremlin has cut gas supplies to try to blackmail Austria over its support for Ukraine against Russia's war of aggression. Given that Vienna has secured enough gas in storage for this winter, as well as supply of alternative fuel, Austrians may rest assured that this move will backfire.

Predictions