Gazprom resumes flows to Italy via Austria

Russian gas supplies to Italy via Austria have resumed, bringing some relief to gas prices in Europe.

Benchmark gas futures fell as much as 3% after Gazprom said it had found a solution with Italian buyers to overcome the regulatory changes in Austria at the end of September that were preventing transit flows, the company said in a statement on Telegram on Wednesday.

Italy’s energy giant Eni SpA confirmed the resumption of gas flows on Wednesday saying the issue had been resolved, in a company statement. Austrian regulator E-Control said a solution appeared to have been found.

Gas supplies to Italy through a pipeline that passes through Austria were halted on Saturday amid a dispute over regulation, highlighting how Europe still depends on flows from Russia even after supplies on Nord Stream were halted indefinitely.

There has been some wariness over Russia’s next move after sabotage carried out on the Nord Stream infrastructure caused huge gas leaks in Danish and Swedish waters.

The halt to transit flows was caused by Gazprom not paying a guarantee to the Austrian operator for gas passing to Italy, Claudio Descalzi, chief executive officer of Eni SpA said at an event on October 3.

European gas prices fell as low as €157 a megawatt-hour on Wednesday but were little changed as of 9:33am Vienna time.

Disputes over regulation and contractual clauses have been used by Gazprom as a way to limit Russian gas supplies to Europe amid deterioration of relations with the West since President Vladimir Putin started war in Ukraine.

Earlier this year, Kremlin demanded so called “unfriendly states” to pay for the Russian pipeline gas in rubles and halted gas deliveries to those nations that refused to do that. Another step included shutting down Nord Stream for maintenance on turbines amid spat with the manufacturer before it was sabotaged.

©2022 Bloomberg L.P.