IEA chief accuses Russia of worsening Europe’s gas crisis

The head of the International Energy Agency has accused Russia of throttling gas supplies to Europe at a time “of heightened geopolitical tensions” implying Moscow has manufactured an energy crisis for political ends.

Fatih Birol said on Wednesday that the IEA, which represents many big fossil fuel consuming countries, believed Russia was holding back at least a third of the gas it could feasibly send to Europe, while draining Russian-controlled storage facilities on the continent to bolster the impression of tight supplies.

“We believe there are strong elements of tightness in the European gas market due to Russia’s behaviour,” Birol said. “I would note that today’s low Russian gas flows to Europe coincide with heightened geopolitical tensions over Ukraine.”

Birol added, “Russia could increase deliveries to Europe by at least one-third — this is the key message.”

The comments from Birol are his most pointed towards Russia’s role in the energy crisis yet and comes as households in the UK and Europe are bracing for steep increases in their bills after wholesale gas and electricity prices soared to record levels.

Russia has long insisted that it has fulfilled all of its long-term gas supply contracts to Europe but has been accused by policymakers and analysts of holding back supplies since last year by restricting spot sales that were once readily available.

Gazprom, Russia’s state-backed gas company, wants to win approval for the start-up of the Nord Stream 2 pipeline to Germany, which is designed as an alternative to transit routes through Ukraine.

Russia has stationed around 100,000 troops close to the Ukrainian border as Moscow holds talks with the US over European security. There is expected to be a vote in the US Senate this week on proposed legislation to impose sanctions on Nord Stream 2.

Birol said European countries including the UK needed to prepare for future crises by securing additional gas storage to help loosen any country’s influence over the market at times of stress.

He singled out Gazprom’s role in reducing the volume of gas in storage at facilities it controls within the EU.

“In terms of the storage the current storage deficit in the EU is largely due to Gazprom,” Birol said, pointing out total storage is at about 50 per cent of capacity compared to 70 per cent normally in January.

“The low levels of storage in the company’s EU-based facilities account for half of the EU deficit even though Gazprom storage only accounts for 10 per cent of the EU’s total storage capacity,” he added.

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