EurOil: US gains most from "energy market redivision" in Europe, says Russian foreign ministry

The US has gained the most from the "redivision of the energy market” in Europe, Russian Foreign Ministry spokesperson Maria Zakharova told Russian media on January 2, noting that the halt in Russian gas transit through Ukraine on January 2 would hurt living standards for Europeans and weaken Europe’s economy.

She identified Germany as the first "victim" of US actions, citing the sabotage of the Nord Stream pipelines, which has forced the German economy to purchase natural gas at significantly higher prices. The Kremlin has repeatedly blamed the US for the pipeline explosions in September 2022, which Washington has vehemently denied. Western media has pointed to a Ukrainian group as the perpetrator.

"Other countries in the once economically successful and independent EU will now have to pay their price for American patronage," Zakharova remarked in a statement.

Russian pipeline supplies provided as much as 40% of Europe’s gas before the war in Ukraine, but following deep cuts in deliveries in 2022 and the end of transits through Ukraine this year, that share has now shrunk to under 5%. While overall gas consumption has fallen in the EU as a result of growing renewables generation, weak economic performance and deindustrialisation, the bloc has resorted primarily to US LNG and to a lesser extent extra Norwegian pipeline gas to replace lost Russian volumes. This has supported final investment decisions (FIDs) being taken on a record volume of US LNG exports in the past three years.

Gazprom’s five-year gas transit contract with Ukraine’s Naftogaz expired at the start of the year, after Kyiv repeatedly said it would not agree to a renewal. Slovakia and some European gas buyers lobbied unsuccessfully to find alternative options to ensure gas flow continued. The Slovakian government is now discussing retaliatory measures against Kyiv to pressure it to resume transit.

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