This decision means that Russia will now primarily supply substantial gas volumes to Hungary and Slovakia, a stark departure from its previous role in fulfilling 40% of the EU's gas requirements prior to its invasion of Ukraine in 2022.
Austria was the first Western European nation to purchase Russian gas, having signed a contract with the USSR in 1968, shortly before the Soviet invasion of Czechoslovakia. This year, the longstanding relationship will conclude due to a contractual disagreement between Russia's Gazprom and Austria's OMV.
In a statement released on the central European gas hub platform, OMV indicated that Gazprom had notified them of the supply halt effective Saturday. Gazprom has not provided any comments on the matter.
Austria remains one of the few European countries still reliant on Russian gas, as many others have significantly reduced their imports following the conflict in Ukraine. OMV has stated that it has been preparing for this eventuality and can continue to supply gas to its customers through imports from Germany, Italy, and the Netherlands.
Analysts at Eurointelligence noted that this situation is likely to worsen the energy crisis in Austria, which has already seen a considerable decline in gas demand and adverse effects on its manufacturing sector. They remarked, "Austria's economy is currently in recession. Germany is sneezing, and Austria is catching the cold."
Germany, which was also heavily dependent on Russian gas before the war, experienced a halt in shipments after the Nord Stream pipelines were damaged in 2022.
The announcement regarding the cessation of supplies to Austria coincided with a phone conversation between Russian President Vladimir Putin and German Chancellor Olaf Scholz, marking their first discussion since December 2022.
The Kremlin stated that Russia is open to exploring energy agreements if Berlin expresses interest.
The Kremlin highlighted that Russia has consistently honored its treaty and contractual commitments in the energy sector and is open to mutually beneficial collaboration, should the German side express interest.
In 2023, Russia exported approximately 15 billion cubic meters of gas through Ukraine, accounting for only 8% of the peak gas flows to Europe observed in 2018-2019, as reported by Reuters.
This transit route fulfilled 65% of the gas demand for Austria and its eastern neighbors, Hungary and Slovakia, according to the International Energy Agency. Ukraine has indicated that it does not intend to extend the transit agreement beyond 2025, which would result in a reduction of gas supplies for Austria and Slovakia.
Hungary has significantly reduced its gas imports via Ukraine, now relying on the TurkStream pipeline that runs beneath the Black Sea. Meanwhile, Slovakia continues to receive Russian gas through Ukraine.
EU Energy Commissioner Kadri Simson stated to Reuters during a UN climate conference in Azerbaijan that all EU nations receiving gas through the Ukrainian route have access to alternative supply sources that can compensate for any shortfall.
"We have made it clear that alternative supplies are available, and there is no necessity for the ongoing transit of Russian gas through Ukraine to Europe," Simson remarked.