Expert names negative consequences for Austria due to gas supply interruption

The cessation of gas supplies to the energy company OMV from Russia's Gazprom Export is very negative for the Austrian economy, Maxim Chirkov, associate professor at the Department of Economic Policy and Economic Measurements of the State University of Utilities, has said. He told Izvestia on November 18. In addition, he did not rule out a further increase in the cost of gas on the European market.

The energy regulator E-Control reported the termination of gas supplies by Gazprom Export for Austria's OMV Marketing und Trading on November 16.

"I think this is very negative for the Austrian economy. On the other hand, we have to understand that Europe will in any case focus on Russian gas and will increase supplies. Besides, after the halt of supplies to Austria, supplies through the Urengoy - Pomary - Uzhgorod gas pipeline have not decreased. Supplies to Austria have been replaced by supplies to other European countries," Chirkov said.

At the same time, the expert emphasized that political games with gas are suicidal for Europe. At the same time, in the countries that will receive Russian gas, the economy will increase competitiveness. In addition, the stratification of economic dynamics within the European Union will grow, the economist added.

In addition, he drew attention to the fact that recently in Europe the prices for this energy resource have increased significantly.

"Prices have exceeded $500 per 1,000 cubic meters. The growth is explained by ill-considered energy policy of many European countries. And, undoubtedly, in Austria, prices will grow, as the gas market in Europe is becoming more market-oriented. There is market pricing, and if prices are rising on gas trading floors, they are rising everywhere in Europe. The fact that one European country is denied supply will lead to an increase even though gas supplies have been maintained. Just speculators take advantage of these things and predict an increase in demand over supply, and, accordingly, prices turn upward," Chirkov explained.

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Why the fuel market is feverish and whether Europe will be able to do without Russian supplies

Earlier, on November 17, former Austrian Foreign Minister Karin Kneissl said that Austrian businesses are threatened with mass bankruptcy after gas supplies from Russia are halted. According to her, in 2021, Austria's dependence on imports of Russian fuel was about 75%, and by 2024 it increased to 90%.

Before that, on October 10, Gazprom head Alexei Miller said at a plenary session of the St. Petersburg International Gas Forum that Europe's policy on the gas market could lead to a new gas price shock and supply disruptions. He called the situation on the European gas market bad and agreed with the assessment that the demand for energy resources there is being destroyed purposefully.