Putin denies Russia is restricting gas supplies to Europe

Vladimir Putin has vehemently denied Russia is limiting gas supplies to Europe to drive up prices but offered no indication that there would be swift action to relieve tension in volatile energy markets.

The Russian president told a conference in Moscow on Wednesday that accusations of state-owned Gazprom using energy as a “weapon” to speed up approval of the recently built Nord Stream 2 pipeline to Germany were “politically motivated blather”.

Putin said Russia was meeting all requests for gas supplies from Europe, adding that Gazprom had already exceeded its contractual obligations to customers in the bloc. But he stressed that further supplies depended on requests from the EU — who, he implied, would have to buy gas on Russia’s terms.

“We’re increasing [supply] as much as our partners ask. There hasn’t been a single refusal. Not one,” Putin said.

Analysts and traders say, however, that there have been no signs of additional gas supplies since Putin’s hints last week that Russia could increase exports to help calm prices, which have soared to more than five times the level of a year ago.

Putin reiterated comments made frequently by Kremlin officials that European customers would need to sign long-term contracts — which are often for two decades or more — to secure additional gas supplies from Russia, rather than via the spot market as favoured by the EU.

He said he would be happy to discuss “additional actions” with the EU without providing specifics.

“If anyone was expecting there to be some dramatic announcement about them auctioning additional volumes of gas for Europe in the short term, they’ll have been disappointed,” said Laurent Ruseckas at IHS Markit, a consultancy.

“That’s what the market was listening for and it wasn’t forthcoming, beyond the comments we’ve heard before . . . but what Putin did reiterate is that once NS2 is operating that would be positive for supply.”

Putin helped temper surging gas price rises last week by saying Russia was prepared to intervene to stabilise a “speculative craze” on volatile energy markets.

Putin argued that Gazprom had already reached capacity for sending exports under current routes, saying the approval of Nord Stream 2, which bypasses Ukraine to supply gas to Germany, would help “significantly relieve tensions on the energy market” if it were approved by German regulators.

Kadri Simson, EU energy commissioner, said the commission was “looking at all issues around manipulation and anti-competitive activity including concerns around Gazprom”.

“Our initial assessment is Gazprom is fulfilling its contracts while providing no additional supply,” said Simson.

The International Energy Agency, which is primarily funded by OECD members, has said it believes Russia could increase exports to Europe by 15 per cent and has called on Moscow to demonstrate that it is a “reliable supplier”.

Russia’s deputy energy minister Evgeny Grabchak told reporters on Wednesday that Gazprom would continue filling domestic storage facilities until November 1, a sign that Russia was in no rush to divert supplies to Europe.

European gas prices have eased slightly since Putin’s comments last week, but are still well above previous years. The benchmark contract for November delivery was trading above €90 per megawatt hour on Tuesday, more than 5.5 times the level of a year ago.

Putin also said Russia was targeting achieving carbon neutrality by 2060, underlining the Kremlin’s growing appreciation of the threat from climate change. Russia’s Arctic region is warming three times faster than the global average.

But Putin also said that natural gas, as well as hydrogen and ammonia, would play a greater role in the energy mix, implying that Russia would continue to exploit its huge natural resource base.