The Don brings gas from Russia to Italy and increases Gazprom’s earnings so Vladimir Putin can use it in the war in Ukraine. 2022 has been a historic year for gas imports in Italy: Russia is no longer the country with the highest gas imports. But in the first weeks of 2023, the cold brought Russian gas back to Italy, bringing hundreds of millions of euros into the Kremlin’s coffers to be used in the war. From the data we can see how much Gazprom earns every day from the sale of gas to Italy, but the overall collapse of export revenues across Europe is clear: 2023 should mark the definitive transition to getting rid of Russian gas thanks to other suppliers – Algeria, for example – and LNG. However, there may be obstacles.
It’s cold, we need more gas
After the extraordinarily mild temperatures in October, November and December, the frost wave in Italy and Europe is causing an increase in gas consumption and withdrawals from warehouses. More electricity and gas are needed for heating, so the demand is higher as seen in the graph.
Click here to see the graph of gas consumption and storage in Italy in 2023
According to Snam data processed by TodayGas consumption has increased in recent days, although it remains at lower levels than in January 2022. The graph shows how increased demand for gas is causing more withdrawals from tanks that remained half full, especially compared to last year. year: According to Agsi data prepared by TodayOn the same days in 2022, warehouses were actually 54 percent full, compared to the current 74 percent.
Click here to see the graph of gas consumption and storage in Italy in 2023
In addition, it is seen that the cold weather in recent days has increased gas imports from Russia.
More gas from Russia, more money for Putin and Gazprom
In January 2023, more gas came from Russia to Italy than in the last weeks. In fact, in recent months, Russia’s gas imports have fallen to what we can call “historic” levels: In 2022, Russia was not Italy’s top gas importer. Gas supplies from Russia are at their lowest level since 1990.
However, in the first weeks of January 2023, Italy started importing Russian gas again. Even if prices were lower than in previous months, supplies have allowed Gazprom to make hundreds of millions of euros in Italy alone: useful money for Vladimir Putin's war in Ukraine.
Based on data collected and processed by Crea TodayRussia's gains from gas sales to Italy have increased in recent weeks, reaching highs not seen since May. But in general, the European market for Gazprom is no longer as profitable as it used to be, and Russian gas in 2023 should be even less than in 2022. Can we do without it?
How to change Russian gas: to all LNG
Exceptionally above-average temperatures have kept gas consumption low and allowed Italy and other European states to save several billion cubic meters of gas compared to past winters. While the rising temperatures were no reason to rejoice, the abnormal temperature allayed gassiness and fears of rationing and nullified Gazprom's blackmail.
In fact, in 2021 Russia accounted for 40 percent of gas imports to Italy, this rate has dropped to 16 percent in 2022. Italy, together with its European partners, diversified its portfolio of gas supplier countries instead of Russia. Now, Italy's top gas importer is Algeria, though not yet at the promised levels.
The fastest way to replace the gas supply from Russia is with LNG, which is liquefied natural gas. In 2023, Italy will add two more gasification plants to the existing three regasification plants in Piombino and Ravenna. Germany has already opened three new plants and overall European LNG demand has increased. In addition, Italy is betting on increasing supply from existing gas pipelines.
But the return of China in 2023 could create major imbalances in the LNG market: the easing of the zero covid policy by the Xi Jin Ping regime would divert large quantities of LNG to the East, creating dangerous bottlenecks in Europe right now. It will need more gas. As a matter of fact, in April 2023, European states will have to start replenishing their stocks due to the winter of 2023-2024, and in the absence of Russian gas, the shortage in the market may create supply problems.
Now even Qatar can blackmail us with gas.
Italy and Europe's energy security cannot depend on good weather: after eliminating dependence on Russian gas, it's time to increase the availability of renewable energies, even if the green transition as we know is long and complex.
Source: Today IT
Roy Brown is a renowned economist and author at The Nation View. He has a deep understanding of the global economy and its intricacies. He writes about a wide range of economic topics, including monetary policy, fiscal policy, international trade, and labor markets.
