Expert says EU deindustrialization due to Russian gas policy

Europe has a strong interest in Russian gas supplies. Without it and other resources supplied by Russia, it loses its competitiveness. Europe has already started deindustrialization processes and is losing its technological leadership, which is a consequence of an ill-conceived energy policy. Maxim Chirkov, associate professor of the Department of Economic Policy and Economic Measurements of GUU, told Izvestia on November 21.

Earlier in the day, RIA Novosti reported that, according to their calculations based on Eurostat data, Russia in September became the main supplier of gas to the European Union (EU) for the first time since the spring of 2022. Companies bought from the Russian Federation volumes of the resource for €1.4 billion. Approximately 40% of the supply is liquefied natural gas (LNG), and 60% is pipeline gas.

The expert noted that Europe is strongly interested in Russian gas supplies, and what has been happening to it over the past few years is nothing more than political games. There are countries that have formally refused to consume Russian gas, but they still consume it, particularly Germany.

"European energy companies would choose all possible volumes because Russian pipeline gas is much cheaper than liquefied natural gas, the prices of which have been rising very seriously recently at the leading European hubs TTF and Baumgarten. Gas prices there in recent weeks have exceeded $500 per 1,000 cubic meters, which is much higher than Russian gas prices. Supply difficulties are hurting the European economy more than the Russian economy. Of course, companies in Europe would be interested in as much gas from Russia as possible, its reliable supply from Russia at lower prices in order not to lose their competitiveness," Chirkov said.

As he pointed out, there is no doubt that pragmatics trumps politics. Europe without Russian resources, not only gas, is catastrophically losing its competitiveness.

"The processes of deindustrialization have already been launched. Europe is losing its technological leadership. This is a consequence, among other things, of ill-conceived energy policy," Chirkov concluded.

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Earlier, on November 15, the Austrian company OMV Gas Marketing & Trading GmbH (OMV) said that it expects Gazprom Export to stop supplying gas.

Before that, on November 14, it was reported that gas prices in Europe reached the highest level for the last year after the Austrian group OMV warned of possible supply disruptions from Russia.

In October, Gazprom CEO Alexei Miller said at a plenary session of the St. Petersburg International Gas Forum that Europe's gas market policy 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.