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EurOil PIPELINES & TRANSPORT EurOil

Russian gas supply to Europe could

fall by third in 2022, analysts warn

RUSSIA ANALYSTS warn that Gazprom could lose as year, down from about 150 bcm in 2021. Sindre
much as a third of its market share in Europe as a Knutsson, head of gas market research at Rystad
The analysts consider result of fallout from the war in Ukraine, Reuters Energy, predicts that supplies could fall even fur-
risks of either side reported on April 22. ther, “driven by a push from buyers to become
cutting off supply. Russia covers around 40% of the gas that less reliant on Russia, or by Russia holding back
Europe consumes, but the EU is now making a volumes, for example driven by a disagreement
concerted push to phase out Russian imports, on which currency the gas should be paid in.”
targeting a reduction of as much as two thirds Knutsson did not rule out a cut in gas transit
in a single year. Russia has meanwhile threat- via Ukraine if the conflict causes damage to the
ened to cut off supply if so-called “unfriendly” country’s transmission system.
countries that have supported sanctions do Gazprom’s main customers in Europe are
not make payments for their gas at special Germany, which took 45.8 bcm of gas in 2021,
accounts at Gazprombank, for conversion Italy, which took 20.8 bcm, and Austria, which
into rubles. bought 13.2 bcm. Both Germany and Italy have
Sergei Kapitonov, at the Energy Centre at announced plans to ramp up LNG imports,
Moscow’s Skolkovo School of Management, while Austria’s options are limited, unless it can
warns that Gazprom’s deliveries to Europe could tap supply that arrives in Europe in neighbour-
slump by as much as 40-45bn cubic metres this ing states. ™
POLICY

EU prepares “smart sanctions”

against Russian oil

RUSSIA THE EU is preparing “smart sanctions” against Such an embargo would cause a significant
Russian oil imports that increase pressure on dent in Moscow’s export revenues. Europe
Chinese and Indian Moscow while limiting the impact on European spends about $450mn each day importing Rus-
buyers are considered economies, the European Commission’s vice sian crude oil and refined products, along with a
the most likely president Valdis Domnbrovskis told The Times further $400mn for Russian gas and $25mn for
recipients of exiting on April 25. coal, according to Bruegel.
Western majors' stakes. “We are working on a sixth sanctions package The European Commission proposed a ban
and one of the issues we are considering is some on Russian coal earlier this month, but it is reluc-
form of an oil embargo,” Dombrovskis told the tant to take such action against gas, as this would
UK newspaper. “When we are imposing sanc- leave the bloc vulnerable to energy shortages.
tions, we need to do so in a way that maximises Diplomats told Politico on April 22 that the
pressure on Russia while minimising collateral latest sanctions package was set to be presented
damage on ourselves” to EU countries this week. In addition to a form
Exactly what shape these sanctions would of ban on Russian oil imports, it is also expected
take is unclear. But according to the Times, they to expel more Russian banks from the SWIFT
could include a gradual phasing out of Russian international payments system. ™
oil, or the introduction of a tariff on Russian
exports above a certain price cap.
Europe is the largest market for Russian
oil, accounting for 60% of the country’s overall
crude exports. Russia is also the EU’s largest
supplier, providing more than a total of the oil
it consumes. Several EU states including Poland
and Lithuania have called for an outright ban on
Russian oil imports, although Germany, Hun-
gary and other states that are more dependent
on Russian supplies have opposed an immediate
embargo.

Week 17 27•April•2022 www. NEWSBASE .com P7