March 4. 2024. 10:16

The Daily

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Austria hesitant to halt comeback of cheap Russian gas

Stopping the comeback of cheap Russian gas to Austria by adopting measures is something the government is hesitant about, citing concerns of expropriating government-owned assets.

Few countries are more dependent on Russian gas than Austria. When the Kremlin attacked Ukraine, 80% of gas flows into the Austrian gas market were supplied by Gazprom, owing to a rich history of gas deals with Russia.

At times, Gazprom supplied less than 30% of the volume that Austrian energy major OMV contracted for. These gas flows are back up to 100%, which has resulted in calls that the government to step in to avoid Russia financing its war through gas sales.

“OMV has long-standing contracts with the Russian Federation,” Austrian Chancellor Karl Nehammer told ZIB2 on Friday.

“If the Russians continue to deliver, then I can’t forbid OMV from fulfilling contractual obligations,” he added. “How do you imagine that, with an expropriation law?” he added.

Unlike Germany, once the single largest buyer of gaseous hydrocarbons from Russia and an ally in resisting an EU-wide embargo on gas, Austria is sliding back into dependence on Russian gas.

In December 2022, about 70% of gas came from Russia, according to data from the regulator E-Control. Austria has purchased Russian gas valued at €7 billion since the war in Ukraine started, according to the liberal party NEOS.

Nehammer said that limiting the amount of Russian gas flowing into Austria meant that “OMV would be in breach of contract.” Given that Austria owns 31.5% of the company, doing so would entail losses to the government, he added.

“It is a matter of securing state assets and keeping existing contracts as long as possible,” he said.

(Nikolaus J. Kurmayer |