Russia reduces gas supplies to Germany

Russia reduces gas supplies to Germany

Russia reduced natural gas supplies to Germany in retaliation over Europe’s penalties, German Economy Minister Robert Habeck said.

A unit of Gazprom PJSC that was seized by Germany is no longer receiving all contracted volumes, according to Habeck, who is also the vice chancellor in the ruling coalition in Berlin. He downplayed the impact, saying Europe’s biggest economy is receiving gas from alternative sources and can cope with the disruption. 

“The situation is that the gas market can compensate for the loss of gas from Russia,” Habeck said Thursday in a speech to the lower house of parliament. . “We are monitoring the situation closely,” he told lawmakers. “We have prepared for the situation and I, and the federal network agency, will inform you through the course of the day.”

The reduction in supplies to the unit marks the latest escalation in Europe’s standoff with Russia over energy. Natural gas prices in the region jumped on the German retaliation and disruptions to a key transit route through Ukraine. Russia had already cut supplies to Poland and Bulgaria amid a dispute over payment terms. 

Moscow prohibited dealings with Gazprom Germania GmbH and its various subsidiaries now under the control of Germany’s energy regulator. That includes energy supplier Wingas GmbH, a European gas storage business, the London-based trading arm of Gazprom and EuRoPol Gaz, owner of the Polish section of the Yamal-Europe pipeline connecting Russia to Germany.