Russia’s Gas Sanctions: How Long Until Winter? †

In response to sanctions from Europe, Russia has been imposing sanctions on energy companies since this week. As a result, among other things, less Russian gas flows into Europe. According to experts, this does not directly lead to a gas shortage in the Netherlands. Nevertheless, an exciting winter awaits you.

The German gas company Wingas is one of the companies removing gas from the Russian sanctions list. Eneco is dependent on Wingas for approximately 15% of its gas supply, but states that Wingas “meets its contractual obligations”. Eneco does not yet want to express any expectations as to whether the Wingas boycott will cause any problems.

Neighboring Germany feels Russian sanctions through Gazprom Germania, the German subsidiary of the Russian state-owned company Gazprom. For example, the German Economy Minister, Habeck, announced that “certain subsidiaries” will no longer receive gas deliveries. Since the gas storage facilities of Gazprom Germania are no longer stocked with Russian gas, it assumes that the supply of German gas will be affected by the sanctions.

Russian sanctions also hit Gazprom itself. This company can no longer supply gas to Europe via the Yamal gas pipeline; The owner of the Polish part of this pipeline is on Russia’s sanctions list.

Other pipelines

According to Machiel Mulder, professor of energy economics at the University of Groningen, this alone does not have to cause a gas problem in Europe. “The Yamal pipeline has been used much less since last fall, so it will have no impact if no gas flows through it. You can already see this effect in current gas prices,” he says.

“North Stream 1 is especially important because 1200 million cubic meters of gas circulate there every day,” emphasizes the professor. “Gas pipelines through Ukraine are also important for Europe’s gas supply of about 500 million cubic meters per day.”

Most Russian gas reaches Europe via:

Gas prices are still up more than 20% after Thursday’s announcement, despite the fact that the Yamal pipeline has been used less frequently to transport gas to Europe in recent months.

“The market reacted sharply as it was unclear whether the reduction in gas supply was sufficient to meet demand. Prices have also risen, as two major transit pipelines through Ukraine have also been absent since the beginning of this week. But today gas prices have fallen again to 100 euros per megawatt hour,” says Engie analyst Chris Guth.

European gas prices

The Netherlands may not immediately feel the consequences of Russian sanctions, but that could change in the longer term.

Professor Mulder: “If less gas enters somewhere in Europe, this has direct consequences for the gas price. So also for the Netherlands. Because the price of Dutch gas is strongly linked to the prices of other European countries,” he explains. It thus determines the European gas market, where gas flows are interconnected and there is in fact a European gas price.

Gasoline prices reacted quickly to the tense market last week. Experts say there is no acute problem yet. Energy analyst Guth says that could change later this year. “Because there are now fewer export routes, for example if a failure occurs elsewhere, next winter could be particularly exciting,” he says.

Meanwhile, there are plans to make Europe less dependent on Russian gas. Next Wednesday, the European Commission will present its so-called RePowerEU plan to help Europe get rid of Russian energy by 2030. It was announced today that eliminating Russian gas would cost the European Union 195 billion euros.