Gazprom’s pipeline gas exports to Europe surged to a one-year high in daily flows last week, highlighting the ongoing challenges faced by the European Union as it continues to reduce its dependency on Russian gas. On October 23, Gazprom supplied 99 million cubic meters (MMcm) of gas to Europe, excluding Turkey but including other non-EU countries, marking the highest daily export level since October 18, 2023, when 99.3 MMcm were delivered. This represents the largest volume since the summer of 2022, prior to the halting of flows through the Nord Stream pipeline to Germany, which has been a key conduit for Russian gas to Europe.

Before the Nord Stream pipeline was shut down, Russia’s exports to Europe had already dropped sharply due to declining pipeline capacity, but with the closure of major routes like Nord Stream and the Yamal-Europe pipeline—both crucial for deliveries to Germany—Gazprom’s pipeline exports to Europe have plummeted by nearly 80% since the Russian invasion of Ukraine in February 2022. Despite this, a notable shift has occurred this year, with gas flows into the EU surpassing the total volumes seen in 2023.

European countries like Greece and Hungary have seen a significant increase in imports from Russia. As of last week, Greece’s imports were up by 20%, while Hungary’s were 8% higher compared to their full-year 2023 levels. While Gazprom’s overall gas exports to Europe—including non-EU countries such as Moldova, Serbia, Bosnia and Herzegovina, and North Macedonia—have not yet surpassed 2023 levels, they are expected to do so in the coming month. By October 26, Gazprom had supplied around 26.1 billion cubic meters (Bcm) of gas to the region, compared with approximately 28.3 Bcm in 2023.

This rebound in Gazprom’s export levels is largely attributed to the competitiveness of its long-term, hub-linked contract prices, which have become more attractive in the current price environment. These favorable prices are offering tough competition to spot liquefied natural gas (LNG) imports, prompting many European buyers to increase their gas offtakes, which had previously dropped sharply in the first half of 2023. The price gap between Gazprom’s contracts and the global spot market widened in early 2023 but narrowed significantly by mid-year, resulting in a recovery in exports.

Another key factor in this export rebound is the continued strength of Gazprom’s gas flows via Ukraine, which supply countries like Slovakia, Austria, and Moldova. In October, the average daily flow via this route was 43.2 MMcm, the highest level since May 2022. That month, Ukraine had halted transit through one of its two key entry points on the Russian border due to Russian military activity. Since then, transit flows have remained relatively stable at around 42 MMcm per day, with only a brief dip earlier in 2023.

Meanwhile, Gazprom’s flows through the Turk Stream pipeline, which carries gas to Europe through Turkey, also averaged 47.9 MMcm per day between October 1-26—well above the pipeline’s nominal capacity of 43.2 MMcm per day. Flows through Turk Stream have been directed primarily to countries like Greece, Hungary, Serbia, Bosnia and Herzegovina, and North Macedonia. Although October’s export volumes have been slightly lower than the peak levels observed in July, which was the highest since August 2023, overall flows remain robust.

In addition to pipeline gas, Gazprom’s LNG exports have also been relatively strong this year. Western sanctions, which have focused primarily on new projects like Arctic LNG-2, have not targeted existing large-scale Russian LNG facilities, allowing continued export growth. However, the Arctic LNG-2 project had to halt production earlier in October due to US sanctions, according to sources close to the project.

Despite the sharp drop in Russian gas exports to Europe since the war in Ukraine, Gazprom’s pipeline exports are on track to exceed 2023 levels, thanks to competitive pricing and strong demand from certain EU member states and non-EU countries. As European countries adjust to the ongoing energy crisis and Russia adapts its export strategy, Gazprom’s gas flows, both through pipelines and LNG, will remain a key element in Europe’s energy landscape for the foreseeable future.