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Overcoming energy crisis due to Russian blackmail: European Commission on decrease in gas demand

Overcoming energy crisis due to Russian blackmail: European Commission on decrease in gas demand EU reduces gas demand due to Russian blackmail (Getty Images)
Author: Maria Kholina

Over the past year, the EU has saved approximately 101 billion cubic meters of gas, thereby reducing demand by 18%. Such actions go beyond the target of 15% savings set in the summer of 2022 under emergency legislation, according to the official website of the European Commission.

The Commission proposes adopting a Council Recommendation to extend measures to reduce gas demand, as the situation is currently the most stable in two years. This Recommendation calls on member states to continue voluntary measures to support the overall reduction in gas demand.

Next Monday, March 4, Energy Commissioner Kadri Simson and EU energy ministers will discuss this proposal at the Energy Council. Thanks to a wide range of extraordinary measures taken after Russia's invasion of Ukraine, the EU's energy prospects have improved: supplies have become more diversified, more renewable energy capacities have been installed, and impressive energy efficiency has been achieved. This has contributed to reducing and stabilizing prices in Europe.

"Still, given the persistence of geopolitical tensions, tight global gas markets and the EU's objective to completely get rid of Russian fossil fuels, continued energy savings are still necessary," the EC said.

Further gas savings will help maintain and improve the current stability of the market, as well as contribute to replenishing gas storage in spring and summer. Additionally, they will support EU efforts towards decarbonization.

Gas prices in Europe have dropped to almost a three-year low. Futures at the TTF hub in the Netherlands reached 22.5 euros per megawatt-hour (approximately 250 dollars per thousand cubic meters). According to Bloomberg, current prices are close to levels seen in May 2021 when Russia gradually began cutting off supplies. The price decrease in Europe indicates a comfortable supply situation, with storages still being filled to about 65%.

Furthermore, EU traders are optimistic about the continuation of Russian gas supplies through Ukraine after the expiration of the transit contract. Commercial agreements may be reached to ensure gas supply even after the current contract expires at the end of the year. According to one source, one possibility would be Russia's proposal for supply at the border with Ukraine.