Russian state-owned gas supplier, Gazprom, has threatened to turn off supplies to Europe’s poorest state, Moldova, in an act of retaliation
Tensions have grown between Russia and Moldova as the latter has increasingly distanced itself from Russia to align with Europe and the West.
However, 100% of Moldova’s gas comes from Russia, and the current contract with Gazprom expired at the end of September.
Although the contract was recently extended to the end of October, Gazprom raised the price from $550 to $790 per cubic meter, making the cost unviable for Moldova.
In a statement to the media, Aleksandr Slusari, founder and deputy chairman of Moldova's Dignity and Truth Platform Party said: “It is clear that all the energy resources of the Russian Federation are used as an instrument of economic blackmail that turns into political blackmail.”
The spotlight has been shone on Gazprom not just for its dealings with Moldova in recent weeks.
According to reports in the FT, the gas producer has recently emptied its gas storage facilities to “unusually low levels” – around 75% – in a move critics claim are an attempt to engineer shortages and therefore increase prices.
And the impact is huge. Gazprom has influence over almost one-third of all gas storage in Germany, Austria and the Netherlands.
Currently the Gazprom-owned Rehden gas storage facility in Germany (which typically holds a fifth of the country’s storage capacity) is less than 10% full, compared to 2019 when the unit was kept completely full.
As such, the energy crisis facing Moldova has attracted wider and raised fears of an international dispute.
On Wednesday, European Commission president, Ursula von der Leyen, said the commission would provide Moldova with €60m to help the country's pro-EU administration buy gas.
Meanwhile, Ukraine pipeline operator, GTSOU, announced it was sending Moldova 15m cubic meters (mcm) of gas in support.
Speaking to Politico, Sergiy Makogon, CEO, GTSOU said: “We are all too familiar with the pressure tactics that can only be described as weaponisation of energy and unconcealed blackmail.
“So when we learned that Moldova had to declare a state of emergency, the GTSOU didn’t hesitate to offer help in the spirit of solidarity.”
The Commission's €60m is enough to pay for about a week's worth of Moldovan gas consumption at current rates. The country is currently using between 7-8mcm of gas each day but this is expected to rise to between 12-15mcm as winter approaches.