According to German energy companies, the Russian state gas giant Gazprom has made up to 40% less gas available for its last major pipeline, Nord Stream 1 from Russian stocks. The price increases by almost 16% for the contract to have gas delivered in July.
As usual these summer weeks, production will be maintained where possible, the large gas installations and pipelines are being prepared for the tough winter season.
‘Siemens too late’
In addition, there is now a major delay in repairs by the German Siemen. According to the Russians, the group has not delivered a large compressor, which provides the pressure in the gas system to transport the liquid, to the state-owned company on time, Gazprom itself reported via Telegram. Siemens has not responded.
It is unclear how long the limited delivery will take. According to the Deutschen Institut für Wirtschaftsforschung, there are no reasons for concern for the time being. “We are in the summer months, so less gas is needed,” said Claudia Kemfert, head of the energy, transport and environment department at the German Institute for Economic Research. It does say it is “monitoring the situation closely”.
Gazprom previously restricted gas supplies to the Netherlands, Poland, Finland and Bulgaria after those countries refused to pay in rubles. Only 100 million cubic meters of gas goes through the pipelines to Germany every day, which is normally about 167 million cubic meters of gas.
The gas systems are interconnected in Europe. In the event of shortages, countries have agreed to help each other. According to the Dutch Gasunie, there is no reason for extra care or interventions yet. The Dutch cabinet does not want to extract extra gas from the gas field in Groningen, which is being phased out and closed within two years, for fear of severe earthquakes in the extraction area.
Blockages
The slowdown in gas supplies follows a blockade by Europe of the last part of the new Nord Stream 2 pipeline from Russia’s major stockpiles after President Putin invaded Ukraine on February 24 and has been waging a very bloody war ever since.
The third gas line, the Jamal pipeline to Europe, has not been filled before. The transit of Russian gas through Ukraine has also decreased.
In addition, it appears that oil cartel OPEC reported that it sent much less oil to the market in the past month than it previously promised. That message comes shortly after the front of state oil companies, which is cooperating with Russia, will increase oil production less quickly than previously thought for the next two months.
In response, the oil price rose another 2.2% and reached a price of $125 per barrel of 159 liters on Tuesday afternoon.
‘less demand’
Although Saudi Arabia and the United Arab Emirates recently agreed to deliver more oil, 648,000 barrels per day versus 432,000 previously planned, member states Iraq, Libya and Nigeria failed to deliver on their oil supply promises.
Joint supply lagged in a market crying out for more oil. Brent oil, the type that determines pump prices in the Netherlands, has become 60% more expensive in a year.