OMV is attempting to recover €230m ($242m) in damages from Gazprom by offsetting the claim against invoices for gas deliveries to Austria. Credit: csikiphoto/Shutterstock.

Russia has reportedly ceased gas deliveries to Austria following a payment dispute, reported Reuters.

Despite this halt, Russia continues to send gas to Europe through Ukraine, maintaining steady volumes as remaining buyers increase their requests.

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This situation underscores the shifting dynamics in European gas supply, with Russia’s market share declining.

According to the report, Austria announced that Moscow had informed it of the gas supply suspension after an arbitration award to OMV, Austria’s largest energy supplier.

This was related to unfulfilled supplies to OMV’s German unit by Gazprom, Russia’s state-owned company. Austria’s energy regulator, E-Control, confirmed the stoppage of Gazprom’s deliveries to OMV at 6am (0500 GMT) on Saturday.

OMV is attempting to recover €230m in damages from Gazprom by offsetting the claim against invoices for gas deliveries to Austria.

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Gazprom has not commented on the suspension but stated it would continue sending 42.4 million cubic metres (mcm) of gas to Europe via Ukraine, consistent with recent volumes, said the report.

Slovak state-owned company SPP reported continued gas receipts from Russia, with additional purchases by other entities.

“The situation when a large consumer stopped taking gas from the east, but the same volume flows through the territory of Ukraine, shows that there is still great interest in this gas in Europe,” said SPP in a statement, without naming the other buyers.

OMV typically accounts for around 40% of Russian gas flows via Ukraine, approximately 17mcm per day.

Austrian grid operator AGGM noted no substitution of imports from Germany or Italy, with Austria having adequate stocks to cover the shortfall.

Russia’s gas supply to Europe has significantly decreased since the war began in 2022. Gazprom has lost market share to Norway, the US and Qatar.

The Yamal-Europe pipeline via Belarus was closed after a dispute, and Russia accused the US and Britain of causing explosions that shut the Nord Stream route. Both countries have denied involvement and Ukrainian officials have also denied responsibility.

With the halt to Austria, significant Russian gas supplies now primarily go to Hungary and Slovakia. In 2023, Russia shipped approximately 15 billion cubic metres of gas via Ukraine, around 8% of peak flows to Europe in 2018–19.

The Ukraine transit route met 65% of gas demand in Austria, Hungary and Slovakia, according to the International Energy Agency.