V. Yermakov, an expert at CCEIS, wrote an article for the Valdai International Discussion Club on Russian gas supplies to Europe amid the crisis. Key ideas:
• Despite the fighting in Ukraine and an avalanche of Western sanctions, Russia continues to supply gas to Europe without interruptions;
• After a decline in January, gas supplies to Europe from Russia returned to their previous level in February and even increased in the first ten days of March;
• Gas transit through Ukraine was not disrupted even by fightings;• Over the past two years, the European gas market has gone from a supply surplus to a crisis caused by supply constraints (exacerbated by events in Ukraine), driving up prices;
• For over 50 years, Russia-Europe gas relationship has been underpinned by the concept of cooperatively managed interdependence producing mutual benefits, but it cannot remain immune to the increasing geopolitical animosity between the great powers and the emergence of extreme bargaining positions;
• Gazprom's existing production capacity is sufficient to meet the company's obligations under long-term export contracts and cover seasonal peak in domestic demand, but investment in new capacity is required to meet additional new demand;
• Prior to the start of the special operation, Gazprom took a wait-and-see attitude, making it clear that without guarantees of demand there would be no major investments;
• There is a reorientation of gas supplies to Asian markets, and the launch of a special operation reinforces the need for a “pivot to the East”
