Gazprom has so far been able to avoid scrutiny with regard to its support for Russia’s military operation, partly because it began its softening-up operations well before the actual invasion took place on February 24 and partly because the supply decisions made by Gazprom looked at first sight like ordinary commercial decisions from outside the market. In fact they were not.
Gazprom delivered. It held back natural gas from the European spot markets, and as a consequence, gas prices in Europe spiraled to unheard-of levels of more than $1000 per thousand cubic meters over the winter. Gazprom also refused to fully refill European storages, leaving energy commentators across the continent obsessing daily throughout the winter at the low level of gas stocks.
It is true that as China came out of lockdown beginning in the spring of 2021, Chinese demand accelerated, creating a major global knock-on effect on natural gas prices. It is also the case that this price spiral was exacerbated by a series of supply disruptions. However, Gazprom actions turned what would have been an expensive winter into a major European energy crisis.
It is clear now that this softening-up exercise did not ultimately deter the European Union from supporting Ukraine. However, high natural gas prices and low storage levels still deter politicians in some EU member states, notably Germany and Austria, from voicing full-throttled support for Ukraine. To that extent, the Gazprom operation has been success.
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