Russia resumes gas supply to Europe, allays recession fears

After the European Union (EU) announced a new plan to gradually wean itself from dependence on imported gas from Russia, Moscow resumed supply through the Nord Stream 1 pipeline on Thursday (21), after ten days of interruption.

The flow, however, remains reduced, with only 40% of capacity. Pipeline operators claimed the interruption was due to necessary maintenance, but the lack of supply served as a reminder of the economic damage that a lack of Russian gas can relegate to major European economies.

The Kremlin, through its spokesman Dmitri Peskov, once again blamed sanctions imposed by Western countries for difficulties in the supply of natural gas. But he also affirmed that Russia is a reliable supplier and stressed the reminder that it is a substantial and indispensable part of Europe’s energy security.

The EU imports much of the energy it consumes, and Russia has been the biggest supplier of natural gas for the past two years. In 2021, it represented more than 39% of imports. The other two partners with a significant percentage were Norway (25%) and Algeria (8%), show data from Eurostat, the bloc’s statistics office.

Supply disruptions amid the Ukrainian War threatened to cripple Europe’s efforts to replenish storage for the winter months, leading to the risk of rationing, and set the red alert for the danger of recession.

The European Commission, the bloc’s Executive, proposed this Wednesday (20) that member countries reduce gas consumption by 15%. Citizens were also called by authorities to save energy use. The plan, however, was resisted by countries like Spain, whose government has already said that it will not guide the population to limit domestic consumption.

The urgency for the resumption of supply prompted Berlin to act this week to have a Nord Stream 1 turbine that was stranded in Canada returned to Europe. Gazprom, the Russian state-owned giant, said economic sanctions against Moscow were delaying the equipment’s return due to customs barriers.

The turbine, said the state-owned company, would be essential for the resumption of gas export capacity and should arrive in the next few days. Russian leader Vladimir Putin has again suggested that flows could be reduced further because sanctions continue to harm the quality of equipment, which needs maintenance.

Despite the relief, Klaus Mueller, who heads Germany’s energy regulator, argued that political uncertainty remains latent as the 60% cut in Russian supplies remains.

Recent analysis by the IMF (International Monetary Fund) showed that the possible total cut of Russian supplies combined with the consequent decrease in economic activity would lead Germany to see its GDP reduced by around 1.5% later this year.