The head of the IEA invited Europe to prepare for a complete shutdown of gas by Russia

Russia's decision to cut gas supplies to European countries may be a harbinger of further cuts, as Moscow hopes to gain “leverage” in this way, says the head of the International Energy Agency

Europe must immediately prepare for a complete cessation of Russian gas exports this winter, says Fatih Birol, head of the International Energy Agency (IEA). He said this in an interview with the Financial Times (FT).

“Europe must be prepared for the fact that Russian gas will be completely cut off,” — Birol said. “The closer we get to winter, the more we understand Russia's intentions. I believe the shutdown [of gas] is intended to keep Europe from filling up storage facilities and to increase Russia's leverage during the winter months,” — added the head of the IEA.

According to him, the organization invites European governments to take measures to reduce domestic demand for gas to support the operation of aging nuclear power plants.

The IEA was one of the first authorities last year to publicly accuse Russia of manipulating gas prices in Europe, indicates FT.

In the fall of 2021, the head of European diplomacy, Josep Borrell, accused Russia of not providing additional gas supplies to the EU in excess of contractual obligations, which contributes to rising prices. At the same time, Moscow has repeatedly emphasized that it is fulfilling its obligations under contracts and is not involved in the growth of world gas prices. The EU even conducted an antimonopoly investigation against Gazprom, however, as a result, it concluded that the rise in prices was the result of a number of factors, including & mdash; growing demand for gas in the world.

After the start of the special operation in Ukraine, European countries imposed several packages of sanctions against Russia, including against the banking and energy sectors of the economy. Also, European countries decided to refuse gas supplies via the completed Nord Stream 2 pipeline, which runs from Russia to Germany, and decided to diversify supplies by purchasing liquefied natural gas.

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In mid-June, Gazprom announced that it would reduce supplies to Germany via the operating Nord Stream 1 pipeline; due to a delay in the repair of units for the compressor station in Vyborg. This repair was to be carried out by Siemens, which closed its business in Russia, and a broken unit can be repaired only in Canada, which, in turn, banned the maintenance and repair of Russian equipment under sanctions.

Nord Stream-1» decreased from 167 million cubic meters. m per day up to 100 million cubic meters. m per day, and then was reduced by another third— up to 67 million cubic meters per day. This decision was considered politically motivated in Germany.

Due to the reduction in gas supplies, Austria, Germany, the Netherlands and Denmark have introduced the first level of emergency warning for gas. This regime implies close monitoring of the situation so that the governments of countries can quickly make decisions if it worsens. Berlin also decided to increase the load on coal stations in order to fill gas storage facilities by 80% by October.

The Netherlands has decided to remove restrictions on the operation of coal-fired power plants for electricity generation without the use of gas (previously they operated at 35% capacity). Denmark also expects a significant deterioration in the gas supply situation, the government of the country has prepared an action plan for the winter period, which provides for the use of emergency gas supplies and the complete or partial cessation of gas supplies to the country's largest gas consuming companies for a limited period.

The European Commission said that against the background of the refusal of energy carriers from Russia, the European Union will need to increase coal consumption for some time. The EC admits that this is not in line with the “green” agenda, but Brussels has no choice.

According to the consulting company ICIS, Europe managed to reduce its dependence on Russian gas to about 20% of its total supply after the start of the special operation in Ukraine from about 40% before, indicates F.T. However, the possibilities of diversifying supplies are almost exhausted, according to ICIS.

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