Russia sent less gas to Europe on Wednesday, escalating an energy standoff between Moscow and the European Union, making it more difficult and expensive for the EU to fill storage ahead of the winter heating season.

The supply disruption, announced earlier this week by Gazprom (GAZP.MM), has decreased the capacity of the Nord Stream 1 pipeline, Russia’s main delivery route to Europe, to one-fifth of its complete capacity.

Nord Stream 1 accounts for around one-third of Russian gas shipments to Europe.

On Tuesday, EU governments adopted a modified emergency plan to reduce gas use after making compromise arrangements to restrict cutbacks for certain countries, expecting that reduced consumption could mitigate the damage if Moscow shuts off supply entirely. 

The proposal underlines concerns that nations would be unable to reach targets for replenishing stockpiles and keeping their populations warm throughout the winter months, and that Europe’s shaky economic development will suffer more if gas is rationed. 

Analysts at Royal Bank of Canada said the strategy might enable Europe get through the winter if Russian gas supplies are at 20-50 percent capacity, but cautioned against “complacency in the market European politicians have now solved the issue of Russian gas dependence.”

While Moscow blamed the supply cutbacks on the delayed return of a repaired turbine and sanctions, Brussels accused Russia of using energy as a weapon to blackmail the EU and retaliate for Western sanctions over its invasion of Ukraine.

Vitaly Markelov, deputy CEO of Gazprom, said that the business has yet to receive a Siemens turbine used at Nord Stream 1’s Portovaya compressor station, which has been serviced in Canada. 

Markelov said that the equipment was subject to sanctions, while Siemens Energy stated that Gazprom was required to present customs paperwork in order to return the turbine to Russia.

Source: Reuters

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