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Recently, Russia has markedly reduced gas sold to European nations in their gas pipelines. This seems very strange to me. In my opinion, the only two logical amounts of gas to sell would be "as much as possible" (if they want to sell gas) or "none at all" (if they don't want to sell gas).

One possible explanation could be that since western technology is no longer sold to Russia, that they have difficulties in gas production or transportation in pipelines. That's the excuse they have been using, that they can't sell full amount due to not getting a turbine repaired in the west. However, most western news sources point out that this is not the true reason but rather an excuse.

I have a theory: since most western companies have made the decision to sell no products at all to Russia, that Russia doesn't need as much foreign currency anymore. They still have some small opportunities to buy products from the west, but the opportunities are much smaller than before the war. Hence, Russia needs only part of the foreign currency they used to need, and to get that foreign currency, they sell only part of the gas they can.

Is this theory plausible? Could it be the real reason why Russia is still selling minor amounts of gas to Europe?

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    I doubt that it is possible to answer this question without engaging in speculation. The companies involved in the gas trade with the EU are under government control. And the Kremlin doesn't always openly communicate what they are doing and why.
    – Philipp
    Aug 15 at 12:10
  • It may be possible to find some sources about foreign currency flow, though -- how much foreign currency Russia used in preceding years and how much they have used since the start of the war.
    – juhist
    Aug 15 at 12:15
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    The question would be answerable if asking for what Russia is to gain from selling some gas and the obvious answer would be money and the less obvious that they can still leave some room for escalation and remain in the news.
    – Trilarion
    Aug 15 at 15:00
  • 1
    Possible duplicate of: politics.stackexchange.com/questions/71542/… Aug 15 at 21:49
  • Why is the EU still praying Russia to deliver gas instead of stopping buying it altogether? disclaimer: I was already asking this question 5 years ago.
    – EarlGrey
    Aug 16 at 15:38

7 Answers 7

70

I am no expert on this by any means, but my thought as to why:

If Russia completely cuts off the gas now, they lose leverage. That is, once the gas is completely cut off, they can no longer threaten to completely cut it off. At that point, Europe could take more drastic measures without fear of further reprisal on the gas front.

If there is still some gas flowing, Europe is more afraid to take actions that would cause the Russians to completely cut off the gas. At the same time, Russia doesn't want to have the line fully flowing as that allows Europe to fill up their reserves completely for the winter.

By having some gas flowing but not all of it, Russia retains leverage while still backing Europe into a corner for the coming winter.

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    Same-same here. I was going to bring up the winter but you nailed it. Winter means Russian can shut Germany's economy down. There's no way the German government lets people freeze to death in their homes while factories are running. They will find a way to keep their people alive but with the US port/dredge situation, it's going to be rough to get LNG there.
    – JimmyJames
    Aug 15 at 21:39
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    @JimmyJames I guess it was supposed to be hyperbole, but to make it clear: No one in Germany would freeze to death. They would need to wear an additional layer of clothes indoor, that's all. To me it doesn't seem like heating residential buildings is anywhere near the top priority. I don't remember the official policy in Germany and the EU though (they do have one).
    – Nobody
    Aug 16 at 18:14
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    @Nobody I can't say I know that much about German weather but, yes, I didn't mean 'freeze' literally. You can die from the cold when the temperature is above freezing. According to this article "municipalities across the country are preparing heating havens to keep people safe from the cold" and that "households and critical infrastructure like hospitals are protected from cutoffs".
    – JimmyJames
    Aug 16 at 20:00
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    @Nobody Also the average low in Berlin in January is a little below 0C. I once lost power for 9 days and while it wasn't anywhere near freezing, after a few days, we started really struggling. And we live in an area where it gets below 0F on a normal basis in the winter. We aren't strangers to the cold. I think you might be underestimating the risks here.
    – JimmyJames
    Aug 16 at 20:07
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    I am in Europe and I can confirm our leaders are afraid to take actions against Russia because Russia might cut off the gas. Just see how many holes are in the sanctions.
    – user253751
    Aug 16 at 20:31
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Russian Federation leadership really likes bargaining and under-the-table agreements ("схематоз" in Russian).

Gas supply is a good field for such agreements so by keeping it, RF encourages all kinds of dialogue with EU countries in the effort to promise something, get something, repeat.

RF does not really want to cut off gas, instead it wants to show as much uncertainty as possible ("пространство для манёвра"), and fish in these muddy waters. What if Germany's nerves get thin and they suddently allow the opening of Nord Stream 2? It's ready and can be activated at any moment and would be a large political victory for the Kremlin.

Keep in mind there are at least four ways how Russia can supply gas: Baltic sea, Belarus, Ukraine and Turkey. Russian Federation decision makers probably think they can play a tune by touching these four "strings" on a gas pipeline "bass guitar". But once you sever a string no melody comes out.

Plus, Russia does want to fulfill its existing obligations, especially to divided countries such as Hungary and Serbia.

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It is the same reason OPEC is limiting its oil exports: smaller amounts at higher prices can mean more profit.

If you look at German imports of Russian fossil energy in 2021-22, you can see that the amount has significantly dropped since the begining of this year, but its value has risen from an average 2.5 billion USD per month in 2021 to more than 3 billion in 2022.

It seems the DESTATIS website does not allow permalinks to filtered tables. You have to select JAHR=[2021, 2022], STLAH=Russische Föderation and WAM2=WA27. Here is a quick diagram I made myself out of the data (© Statistisches Bundesamt (Destatis), 2022 | Stand: 15.08.2022 / 17:55:12):

enter image description here

Overall, the German imports from Russia have risen by 50% in the first half of 2022, a total of 22.6 billion Euro.

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    This would be accurate if Russia was selling gas at spot price. Cut the supply, increase the price. But as far as I understand it, Russia stopped selling spot gas in 2021, and now whatever little gas is sold, is sold at forwards contracts with pre-agreed price. However, it would (in the short term) be a winning move for Russia to unilaterally declare all forwards contracts null and void, and to start selling (little) gas only at spot prices, so the little supply would cause prices to skyrocket.
    – juhist
    Aug 15 at 16:48
  • It may be possible your statistics page calculates values at spot prices. So it may not reflect what Russia is actually getting paid.
    – juhist
    Aug 15 at 16:49
  • Unfortunately, I can't get at numbers for gas seperated from other fuels. Here they are lumped together, for example, with coal. I have read reports in the recent days that ahead of the coal embargo coming into effect at the end of the year, imports have risen significantly to provide for the (black) coal-fired power stations that are now reactivated to make up for expected gas shortages. The effect is the same: The fear of shortages makes prices soar far above the actual reduction of imports.
    – ccprog
    Aug 15 at 17:08
  • Also, I am pretty sure destatis as a government agency looks at customs data, which are based on actual contracts.
    – ccprog
    Aug 15 at 17:11
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Cutting off these EU gas purchases is exactly what Ukraine dreams about. It would be the most severe sanction the EU can put it in place, to stop buying Russian gas entirely. But the EU has till not had the courage to do this. So now Russia should assist and make this decision for the EU?

This may explain why they are somewhat reluctant. It is a really huge flow of money. See the ticker here. EU paid enough money for Russia to buy all Abrams tanks ever built (about 10 000) (counting about $8 000 000 per tank, about $82 000 000 000 paid so far). Try then to beat them all, the only hope is maybe they are not all for sale.

Cutting the supply means it will be no payment for this gas to Russia from EU. EU may potentially even yield, but if it finds the ways to get without, they are unlikely to offer this money again any earlier than the end of the war.

The gas wells are not taps that can be easily closed and opened. They are difficult or impossible to reactivate. This alone makes closing them a far reaching decision.

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    With the obvious caveat that Russia cannot buy US tanks, this answer raises a valid point. If ever the war stops Russia will need money too and probably wants to sell gas again.
    – Trilarion
    Aug 15 at 15:04
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    Russia can pay Russian tanks to be built, though.
    – alamar
    Aug 15 at 15:08
  • @alamar Well, assuming it can find a way to smuggle the currency out of Russia, which it surely can since these sanctions have holes like a sieve. Otherwise there is no point paying people in worthless useless European currency they're not allowed to spend.
    – user253751
    Aug 15 at 21:21
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    @alamar, from the country's perspective (as opposed to Gazprom's), gas is still bought with Euros (or USD). The exchange happens within the Russian banking system, so oversupply of foreign currency is still a problem (as is evident from the exchange rate).
    – Zeus
    Aug 16 at 1:07
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    From what I've understood, Russias military industry is largely autark and does not need foreign currency.
    – gerrit
    Aug 16 at 7:54
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Technological limitations

One cannot just close the valve of a gas well and open it later when needed. There is an (expensive, risky) emergency procedure that can close the well for good, but re-opening it either requires drilling it again or is almost as much expensive.

Reducing the well production rate is possible to some limited extent and is also risky.

There is also limited gas storage capacity in Russia.

Flaring off this much natural gas itself requires infrastructure that is not present at the moment and also will be a PR disaster.


Of course, this does not invalidate the economical, political and other considerations detailed in the other answers.

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    Yes, this is one of the considerations, for sure. Applies to oil as well. Can even lead to negative spot prices.
    – Zeus
    Aug 16 at 9:03
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Lots of other good answers, but one factor to consider is that Russia's current position is not set in stone and may yet evolve in the future, with the coming of winter.

This is summer, gas is nowhere as essential as it will be in the winter (yes, even though heat waves disturb electricity generation and can increase demand, in places with lots of AC).

From Economist, July 28:

“The situation is tense and a further worsening...cannot be ruled out,” Germany’s energy regulator announced on July 26th. Gazprom, Russia’s state-run gas provider, had just said it would further cut deliveries of natural gas through Nord Stream 1 (ns1), a pipeline from Russia to Germany. ns1 was already at 40% of capacity, and has now dropped to 20%. Gazprom blamed turbine trouble: the first of the cuts was attributed to a part sent to Canada for maintenance. That was a pretext. Canada has returned the turbine to Germany, and it could be shipped to Russia any day.

Rather, the cuts are blackmail, aimed at forcing Europe to drop sanctions over Russia’s invasion of Ukraine. Pundits had expected the Kremlin to tighten the screws, but not so quickly. If ns1 remains at 20% of capacity Germany will not be able to reach the government’s goal of filling 95% of its gas-storage tanks by November. They are now two-thirds full.

This is a trade off. Russia keeps cashing in on its sales by letting them go through at a reduced level. But it is also making sure that the EU does not have much leeway to deal with a future shut off, in winter.

Yes, the EU may secure more supplies between now and the European winter. Or it may not and it has several months to stew and let proponents of appeasement make their case that "Russia's viewpoints need to be considered".

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As noted by Phillip there's no way to answer without speculation but cutting off supplies completely would mean that the customers (Western Europe) would be forced to find alternate sources of energy. The costs of these new energy sources are very high. Once western European counties (read: Germany mostly) commit to that, Russia loses leverage. Putting the squeeze on them without forcing their hand is a better strategy.

Interestingly, the Reagan administration was extremely opposed to Germany tying it's energy supply to Russian sources for exactly this reason. It wasn't as big of a problem until Germany decided to move away from nuclear power after the Fukushima disaster in Japan:

Former Chancellor Angela Merkel pledged to halt the use of nuclear power after the Fukushima nuclear disaster of 2011 and utility leaders have prepared for the closure of three remaining reactors by the end of 2022.

Natural gas usage in Germany has been increasing since 2014. The NordStream2 pipeline would have doubled the amount of gas capacity from Russia to Germany helping the nation in it's commitment to eliminate dependence on nuclear power. There is now a major push to reduce gas usage in Germany.

The relationship between nuclear power and gas can be demonstrated by a different but related situation in France:

A cutoff is particularly problematic now because France's nuclear power generation would struggle to pick up the slack as many reactors are currently down for maintenance.

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    What does nuclear power have to do with this? The main use of gas is for heating and industrial applications. Yes, there are some gas-power plants but the contribution of gas to the German electrical energy mix has been declining for quite some time.
    – Roland
    Aug 16 at 5:07
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    Germans are buying electric heaters (and firewood) like crazy. While this is problematic in many ways, having the npp's and the regenerative power (that replaced them) online at the same time would make heating with electricity - to free up gas for industrial processes - much more viable. Aug 16 at 5:36
  • @GuntramBlohm Currently, the limiting factor for replacing gas for heating is (i) supply of heat pumps, (ii) qualified people who can install them. I've had a heat pump installed in my house last year and it took 6 months until it was delivered. That was before anybody anticipated a gas crisis. Insufficient electric power might be a concern for the future but not because of increased demand for heating purposes next winter.
    – Roland
    Aug 16 at 7:43
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    As this answer makes some unsubstantiated claims about the energy supply of Germany, it might be helpful to look at this graph: Electricity sources in Germany from 1990 to 2020. Note that this only covers electricity, not energy consumed by heating or vehicles.
    – Philipp
    Aug 16 at 9:26
  • @GuntramBlohm Not really; even today, the majority of new homes being built still use natural gas for heating.
    – gerrit
    Aug 16 at 12:02

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