Russian gas cut to Europe hits economic hopes after Ukraine grain deal

  • Gazprom says turbine halt will further cut gas to Germany
  • United Nations hopes for grain exports in days
  • US exploring overland routes after Russian strike

KYIV, July 26 (Reuters) – Russia said it will cut gas supplies to Europe from Wednesday in a blow to countries that have supported Ukraine, just as there were hopes that economic pressures could ease after Russia agreed to let Ukraine export grain from the Black Sea ports.

The first ships from Ukraine may set sail in days under a deal agreed on Friday, the United Nations said, despite a Russian missile attack on the Ukrainian port of Odesa over the weekend.

Soaring energy costs and the threat of hunger faced by millions in poorer nations show how the biggest conflict in Europe since World War Two, now in its sixth month, is having an impact far beyond Ukraine.

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The Ukrainian military on Tuesday reported Russian cruise missile strikes in the south, and that Ukrainian forces had hit enemy targets. Russia’s defense ministry did not immediately respond to an out-of-hours request for comment.

President Vladimir Putin warned the West earlier this month that sanctions risked triggering huge global energy price rises.

Russian energy giant Gazprom (GAZP.MM), citing instructions from an industry watchdog, on Monday said gas flows to Germany through the Nord Stream 1 pipeline would fall to 33 million cubic meters per day from Wednesday.

That is half of the current flows, which are already only 40% of normal capacity. Prior to the war, Europe imported about 40% of its gas and 30% of its oil from Russia. read more

The Kremlin says the gas disruption is the result of maintenance issues and Western sanctions, while the European Union has accused Russia of energy blackmail.

Germany said it saw no technical reason for the latest reduction.

Adding to concerns on the energy front, the Ukrainian state pipeline operator company said Russian gas giant Gazprom (GAZP.MM) without prior notice has increased pressure sharply in a pipeline that runs through Ukraine to deliver Russian gas to Europe. read more

Such pressure spikes could lead to emergencies including pipeline ruptures, and pipeline operators are obliged to inform each other about them in advance, the Ukrainian company said. Gazprom could not be immediately reached for comment.

Gazprom had estimated that it supplied 41.7 million cubic meters (mcm) through that pipeline on Monday versus 41.2 mcm a day earlier.

Ukrainian President Volodymyr Zelenskiy warned that the Kremlin was waging an “open gas war” against Europe.

Politicians in Europe have repeatedly said Russia could cut off gas this winter, a step that would push Germany into recession and hurt consumers already hit by soaring inflation.

Moscow says it is not interested in a complete stoppage of gas supplies to Europe.

GRAIN SHIPS

Before the invasion and subsequent sanctions, Russia and Ukraine accounted for nearly a third of global wheat exports.

Officials from Russia, Turkey, Ukraine and the United Nations agreed on Friday there would be no attacks on merchant ships moving through the Black Sea to Turkey’s Bosphorus Strait and on to markets. read more

Moscow brushed aside concerns the deal could be derailed by a Russian attack on Odesa on Saturday, saying it targeted only military infrastructure.

The White House said the strike cast doubt on Russia’s credibility and was watching closely to see if commitments would be fulfilled.

“We will also continue to actively explore other options with the international community to increase Ukraine’s exports through overland routes,” it said.

Russia’s Black Sea fleet has blocked grain exports from Ukraine since Moscow’s Feb. 24 invasion. Moscow blames Western sanctions for slowing its food and fertilizer exports and Ukraine for mining the approaches to its ports.

Under Friday’s deal, pilots will guide ships along safe channels through the naval minefields. read more

A Ukrainian government official said he hoped the first grain shipment could be made from Chornomorsk this week, with shipments from other ports within two weeks.

Zelenskiy was adamant that trade would resume: “We will start exporting, and let the partners take care of security,” he said.

Russian Foreign Minister Sergei Lavrov, on a tour of African countries, said there were no barriers to the export of grain and nothing in the deal prevented Moscow from attacking military infrastructure.

The Kremlin also said the United Nations must ensure curbs on Russian fertilizers and other exports were lifted for the grain deal to work.

AIR STRIKES

The Kremlin says it is engaged in a “special military operation” to demilitarize and “denazify” Ukraine. Both Kyiv and Western nations say the war is an unprovoked act of aggression.

Thousands of civilians have died and millions have fled during the war. Russian artillery barrages and air strikes have pulverized cities.

With Western weapons boosting the Ukrainians, Putin’s forces are making slow progress but they are believed to be preparing for a new push in the east.

Ukraine said on Monday its forces had used US-supplied HIMARS rocket systems to destroy 50 Russian ammunition depots since receiving the weapons last month.

Russia did not comment but its Defense Ministry said its forces had destroyed an ammunition depot for HIMARS systems. read more

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Reporting by Reuters bureaus; Writing by Costas Pitas; Editing by Stephen Coates & Simon Cameron-Moore

Our Standards: The Thomson Reuters Trust Principles.

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