Europe should prepare for total Russian gas supply suspension: IEA chief

Europe should prepare for a scenario where Russian gas supply is completely halted as Moscow continues to look for increased leverage over Europe this winter, the head of the International Energy Agency said June 22.

IEA Executive Director Fatih Birol said the latest cuts in Russian gas flows to Europe were also designed to prevent EU countries from filling storage sites over the summer.

"I would not rule out Russia continuing to find different issues here and there and continuing to find excuses to further reduce gas deliveries to Europe and maybe even cut it off completely," Birol said in emailed comments.

"This is the reason Europe needs contingency plans for if Russian gas is completely cut off," he said.

Birol said the recent reduction in Russian gas flows to European countries was "strategic behavior" by Russian suppliers and was geared toward making it harder for Europe to fill its storage sites.

That, he said, would increase Russia's leverage over European countries in the winter months.

Russia's Gazprom began limiting deliveries to Europe last year and left its own operated European storage sites close to empty ahead of the invasion of Ukraine in February.

In April, Gazprom then began to cut off European buyers that refused to comply with a new ruble-based payment system and earlier this month reduced deliveries via the Nord Stream pipeline to just 40% of capacity.

Gazprom said the fall in deliveries via Nord Stream -- which had been the main route for Russian gas to reach Europe -- was due to maintenance issues at a key compressor station.

Russia has denied that the Nord Stream curtailments were intentional.

However, Germany's economy minister Robert Habeck has cast doubt on the explanations given by Gazprom, saying they were not "technically justifiable".

High prices

The sharply lower Russian gas flows to Germany have seen European gas prices surge again in recent days.

The Dutch TTF front-month contract was last assessed on June 21 at Eur125.53/MWh ($132/MWh), up 52% since the start of the month and 325% higher year on year, according to Platts price assessments by S&P Global Commodity Insights.

Countries across the EU -- including Denmark, Germany, Italy, the Netherlands and Sweden -- have begun implementing emergency gas plans that could ultimately see supply rationing for certain consumers.

Birol said while a full suspension of Russian supply was not the IEA's main scenario, "it is a scenario that we cannot afford to exclude."

"This is the reason why the IEA is talking with European governments to prepare contingency plans," he said.

The EU's energy commissioner Kadri Simson said June 21 the EU remained "united" in the face of Russian gas supply disruption despite Russia's attempts to undermine the bloc's unity.

"In recent days and weeks, Russia has again and again demonstrated that it is an unreliable supplier that uses energy as a political weapon -- trying to single out targets across the EU," Simson said.

"The disruptions in gas flows to a number of countries are clearly designed to undermine the EU's unity and determination in the face of Kremlin's invasion of Ukraine. But the EU has remained united."

Simson said that with winter around the corner, there was a "real risk" the EU would not have enough energy but said storage filling was "advancing well" despite high prices.

According to data from Gas Infrastructure Europe, the EU's gas storage sites are currently around 55% full.

The EU wants to fill its storage sites to 80% of capacity by Nov. 1 under new rules approved last month.