Eastern European countries—many of them heavily dependent on Russian natural gas supplies—are hopeful that improving security in Ukraine and low global prices will secure gas supplies from disruption, Reuters reported.
Russia has long used natural gas as a political tool in negotiations with Eastern Europe, cutting or reducing supply in diplomatic spats. However, the Russian state relies on energy taxes for a major percentage of its revenue, and facing the current downturn, can ill afford to use the resource as a diplomatic tool.
Thomson Reuters Point Carbon analyst Oliver Sanderson said that storage was heavily utilized last winter as buyers took less Russian gas, most of which is supplied by state-owned Gazprom, buying more during the summer at cheaper prices.
“It’s a buyers’ market out there but Gazprom still has to sell gas and their recent auction underlined that,” Sanderson said. “They are keen on keeping the European market.”
Gazprom in particular is under increasing pressure to keep pipelines flowing, as it faces increased competition as a European supplier. The company is offering increasingly generous terms to consumers in an attempt to maintain market share, noted Trend News Agency
Recently the Russian government re-affirmed its commitment to the Russia-Turkey Turkish Stream pipeline, saying that it would offer gas to Asia Minor at a discounted rate if the project moves forward. Russia also wants an increase in supply volumes to Turkey.