Europe's natural gas reserves at record high as winter season ends
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The Gas Infrastructure Europe (GIE) estimates the volume of gas still in storage at 66.
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A natural gas storage facility in Bierwang, Germany (AFP)
As of March 1, natural gas storage in Europe was more than 60 percent full, its highest seasonal level recorded, the association of European gas infrastructure operators data revealed on Sunday.
The association, known as Gas Infrastructure Europe (GIE), estimated the volume of gas still in storage at 66.
One billion cubic meters, double the volume retained at the end of the last heating season when gas levels fell in mid-December below 60 percent.
During the 2019-2020 heating season, when demand was low, Europe's gas storage levels were around 60 percent. Since 2011, these are the largest volumes ever stored.
Earlier this week, European Energy Commissioner Kadri Simson stated that the mandated consumption cuts allowed the European Union to reduce Russian pipeline gas imports, despite purchasing nearly double the amount of Russian liquefied natural gas in 2022 bought the previous year.
Last month, European Union member states agreed on price caps for Russian petroleum products ahead of an international embargo, Swedish officials said.
The agreement aims to target Russia's key exports and is the latest part of international pressure to limit Russian President Vladimir Putin's reserve of funds for his war in Ukraine.
In December, the EU imposed an embargo on Russian crude oil coming in by sea and agreed with its G7 partners to impose a price cap on Russian oil at $60 per barrel.
However, it was revealed in mid-January that the US was hesitant to approve a lower price cap on Russian oil, despite some EU countries urging for directing further cuts to Russia's energy profits.
Oil sanctions are a fail for the West, a win for Russia: The Economist
It is worth noting that sales of Russian crude have not decreased as the West had hoped, and shipments have dodged European ports and headed to China and India instead.
A report by The Economist stated that this actually goes towards the point of the price cap: to keep Russian crude on the market and thus keep the market stable but to curb its profits through the price.
This in turn offers buyers negotiating power, considering that the longer export routes also pose higher freight costs which Russia has to compensate.
It is argued that Russian oil now sells at a 38% discount per price-reporting agencies, which Treasury Secretary Janet Yellen, who helped devise the price cap, sees as a success that the cap is working effectively.
These price-reporting agencies haven't applied their techniques to areas where Russian oil is sold through channels that they are not aware of. For instance, European refiners report to these price-tracking agencies, but Indians do not.
Rates for ferrying oil from Russia to Asia are private and thus not available for these price-reporting agencies to evaluate. Hence, the discounts that Western analysts refer to are actually inaccurate.
The Economist also added that it is difficult to evaluate real pricing because everyone pretends the prices are low.
Russian export, as a result, has become less dependent on Western shipping and financing, which helped evade the sanction somewhat. More than half of western Russian crude was managed by a European shipping or financing firm, but that percentage has decreased to 36%.
