Kremlin Says Cheaper Russian Gas Could Help Europe Amid Soaring Energy Costs
Rising Energy Costs and the Role of Russian Gas in Europe
MOSCOW, Sept 9 (Reuters) - The Kremlin said on Wednesday that European countries were paying the price for shunning Russian gas as energy costs surge and could be buying cheaper supplies from Moscow instead.
European Gas Prices Surge
European natural gas prices have soared amid the war in Iran, reaching their highest level last week since late 2022, when the start of the Ukraine conflict prompted Europe to slash imports of Russian pipeline gas.
Benchmark European gas prices climbed to €75 per megawatt hour last week, more than double their level a year ago.
Kremlin's Critique of European Energy Policy
Kremlin spokesman Dmitry Peskov said Europe was hurting itself by buying expensive gas on the spot market instead of opting for cheaper Russian options.
"Europeans should of course be looking for cheaper sources of energy. Russian gas, whether piped gas or liquefied natural gas, could long ago have become a cheaper option for them, although LNG is always sold at spot market prices," he told reporters on a daily conference call.
European Gas Storage and Forecasts
Europe's gas stores are around 67% full, compared with nearly 80% a year ago, the latest data from Gas Infrastructure Europe showed.
HSBC forecasts European inventories will reach 73% by November 1, the lowest level at that date since data collection began in 2009.
Decline in Russian Gas Exports to Europe
Russia's pipeline gas exports to Europe fell 44% last year to 18 billion cubic metres, the lowest since the mid-1970s after the closure of the Ukrainian transit route, according to Reuters calculations.
Russian pipeline gas exports to Europe peaked at around 180 bcm per year in 2018 and 2019.
Impact of Nord Stream Explosions
Explosions on the Nord Stream undersea gas pipelines in 2022 also curtailed Russian gas exports to Europe.
One leg of the Nord Stream 2 pipeline in the Baltic Sea remains undamaged.
"Based on common sense, of course, they (Europeans) could long ago have made use of Nord Stream. One of its strings remains intact and operational, and it could be brought back into service at very short notice," Peskov said.
(Reporting by Dmitry Antonov. Writing by Lucy Papachristou. Editing by Vladimir Soldatkin and Mark Potter)
