Moscow escalates energy war as it rejects additional gas shipments through Ukraine

Russia has stepped up its energy war over gas supplies to Europe, rejecting a proposal by Ukraine to shut down more capacity to compensate for reduced flows through the main pipeline to Germany, according to Bloomberg.

Russian energy company Gazprom has chosen not to close additional capacity to transport gas to Europe via Ukrainian pipelines for July at auction on Monday, according to the results of the bookings. This is another indication that supplies from Moscow may remain limited for weeks, as Russia has cut traffic via the Nord Stream pipeline, the largest gas pipeline to the European Union, to just 40% of its capacity.

This supply cut has boosted European gas prices, adding to pressure on EU member states already facing rising inflation. Germany has said that Russia’s supply cuts are “politically motivated” and denies that they are due to technical issues, according to Gazprom.

Gas supply next month could be even more limited, as the Nord Stream pipeline is scheduled to close completely for several days due to annual maintenance work. Ukraine has repeatedly asked Gazprom to increase flows through the Sudzha point to increase supplies to Europe. The Russian company may even close additional capacity through Sudzha through daily capacity auctions, an option it has not used so far this month.

Another crossroads, Sokhranivka, was shut down by the Ukrainian network last month amid fighting in the east.

Gazprom can supply 77.2 million cubic meters of gas per day through Sudzha, but maintains flows of about 42 million cubic meters. At Monday’s auction, the first monthly auction in Ukraine since the Russian invasion in February, Kyiv offered an additional 15 million cubic meters per day of capacity on this route for July.

The extra quantities via Sudzha could have replaced half of the lost capacity of the Nord Stream, which is about 100 million cubic meters per day.