Russia's gas gamble backfires: Europe holds firm, Gazprom flounders

Russia, in the early stages of its armed invasion of Ukraine, tried to stop Europe from aiding the victims of the invasion by threatening to turn off the gas taps. Europeans did not break down, which is causing Gazprom problems. The giant has been sued for a total of £16 billion.

The Kremlin's energy blackmail did not work. Let us remember that the Russian dictator Vladimir Putin, in response to Western sanctions cutting Russia off from the SWIFT system, demanded payment for gas in roubles, although the agreements stipulated otherwise. Most European countries did not give in, and the EU decided to abandon fuels sold by the Moscow regime altogether.

Putin fulfilled his threat, the taps were turned off, and now Gazprom is suffering. The giant lost a wealthy market, and redirecting supplies in the case of natural gas is not as easy as in the case of, for instance, crude oil. Additionally, it has to face lawsuits from customers who were illegally denied the supply of raw materials.

Rzeczpospolita, citing Reuters and the opposition The Moscow Times, reports that at least 19 companies from 11 countries sued Gazprom for nearly £16 billion. The total number of claims against the giant has exceeded its net revenue from gas sales in all foreign markets, as estimated by BCS.

In Poland, a lawsuit against Gazprom was filed by the company EuRoPol Gaz, which manages the Polish section of the Yamal-Europe pipeline. The amount in question is £1.3 billion. The largest lawsuit (£11 billion) was filed by the German company Uniper, formerly the biggest client of the Russian company and co-investor of Nord Stream 2.

"Multibillion-dollar claims create the risk of seizure of payments to Gazprom in Europe," warns Alfa Bank analyst Nikita Błochin: companies demanding compensation may try to seize money that other buyers of Russian gas are forwarding to the company. Such a situation could particularly occur in Austria, where at the end of May, the national gas operator OMV reported attempts to 'intercept' payments to Gazprom," writes Rz.

The newspaper points out that Hungarians, Slovaks, and Italians are still paying the Russians for gas. "For the Russian company, the current situation predicts further restrictions on activities in Europe," warns Błochin.