In the first half of winter, the countries of the European Union consumed 20% less gas on average. This was announced by Eurostat – the statistical office run by the EU – signaling the success of the strategy, which aimed to cut consumption, cut imports and thus lower prices. Element capable of neutralizing Putin’s greatest blackmail weapon against the West. Even if the game isn’t over, experts say Europe could have reversed the winter season to avoid the risk of a blackout, which was the bugbear a few months ago.
The Eurostat bulletin highlights that natural gas consumption decreased by 20.1% in August-November 2022 compared to the average of the same period in 2017-2021. The Community plan to reduce dependence on Russian supplies has set a target of a 15% cut by the end of the season. A goal that now seems within reach. Finland has more than halved the cubic meters of methane burned, countries like Latvia, the Netherlands and Sweden between 30 and 40%, Germany by 25% (thanks to wind power but also coal), France and Poland by 20%. Italy ranks below the continental average but meets the target set by the EU.
A milder than usual first part of the winter season and lower demand due to the economic slowdown contributed to the result. But at this point the EU finds itself in a situation that was completely unimaginable at the end of the summer. In Europe we are being inundated with gas, writes Matteo Villa from Ispi (Institute for International Policy Studies), commenting on a graph in which natural gas storage in January amounts to more than 80 billion cubic meters compared to the average for the five-year period 2015-2020 was 62.
Much higher gas savings than expected – writes Villa in a Twitter thread – have pushed the price down. And thwarted Moscow’s entire strategy. With the EU cornered, further reductions in Russian flows would further drive up the price while Russian revenues remain constant. It would have been a nightmare scenario: Europe on the ropes and Moscow making money as quickly as possible. The cold can always come back, but the worst-case scenario – Europe in the cold, spending cuts and Putin continuing his blackmail – can be shelved for now.
The slowdown in gas consumption combined with the storage policy has another effect: the gas price has returned to the level before the Russian attack on Ukraine: it is currently hovering at around 70 euros per megawatt hour, far from the peak 360 September hit. All this has greatly reduced his main income that the Putin regime can count on, which has fallen by about 30%. The testing ground will be the coming months as countries need to return to the market to replenish stocks ahead of winter 2022-23.