Despite Gazprom cutting off gas supplies to Austria’s top importer, OMV, over a contractual dispute, Russian gas is still reaching Austria as of Monday, according to data flows.
Supply Situation:
Gazprom halted supplies to OMV on Saturday after the company threatened to impound gas as compensation for an arbitration ruling in its favor. However, overall daily gas supply to Europe via Ukraine remains stable.
Before the cut-off, Austria was receiving approximately 17 million cubic meters (mcm) of gas per day from Gazprom, and these volumes are now being redirected to other buyers in Europe, where Russian gas typically remains cheaper.
Transit and Market Dynamics:
The Urengoy-Pomary-Uzhgorod pipeline is a key route for Russian gas flowing through Ukraine to Slovakia, and subsequently to Austria and the Czech Republic. Following the cut-off, flows from Slovakia to Austria dropped by about 17% to 22.6 mcm/day on Sunday, with requests for Monday indicating a slight recovery to 22.3 mcm.
Traders and sources noted that the gas previously destined for OMV is finding new buyers or intermediaries in Europe.
Regional Gas Flow Insights:
Russian gas is still being sold in significant volumes to Slovakia, Hungary, and the Czech Republic, despite the lack of direct contracts with Gazprom for the latter. Flows from Slovakia to the Czech Republic have surged, now accounting for 74% of total Czech imports, potentially sourcing gas from Russia via alternative routes.
Smaller volumes of Russian gas are also reaching Italy and Serbia.
Market Reactions:
Dutch and British wholesale gas prices showed fluctuations on Monday, influenced by colder weather forecasts and reduced Norwegian supply, but were moderated by stable Russian flows via Ukraine and increased LNG deliveries to Europe.
The benchmark front-month contract at the Dutch TTF hub rose to 46.90 euros per megawatt hour, while LNG prices for January delivery to northeast Asia increased to $14.20 per million British thermal units (mmBtu).
LNG Market Movements:
At least five LNG cargoes have recently diverted from Asia to Europe, attracted by higher gas prices following Gazprom’s supply cut to OMV.