Russian gas may still be reaching Austria despite declared stoppage over dispute with energy firm OMV

Despite Gazprom halting gas flows to Austria's main importer, OMV, over the weekend due to a contractual dispute, Russian gas continued reaching Austria on Monday, according to data flows cited by Reuters.

On Saturday, Gazprom cut off supplies to OMV after the Austrian company threatened to seize part of the Russian state-owned firm's gas as compensation for an arbitration ruling it had won. However, overall daily supplies to Europe via Ukraine remained close to their normal levels, according to the publication.

Flows from Slovakia to Austria were around 27 million cubic meters (mcm) per day before Gazprom halted supplies on Saturday. However, they resumed on Sunday, with 22.6 mcm delivered (a 17% decrease), as per preliminary data from the Slovakian gas transmission system operator Eustream. Requests for planned shipments from Slovakia into Austria on Monday stood at 22.3 mcm, rising to approximately 23.6 mcm on Tuesday.

Traders and analysts interviewed by the publication suggested that this could still be Russian gas, supplied via the TurkStream pipeline or through Ukraine, where underground gas storage facilities are already full.

Prior to the supply cut-off, Austria's OMV had been receiving around 17 mcm per day from Gazprom. Those volumes are now being purchased by new buyers or intermediaries in Europe who quickly moved to acquire the unsold gas, according to companies, sources, and data cited by Reuters.

Oil and gas industry expert Sergey Vakulenko, a Senior Fellow at the Carnegie Russia Eurasia Center in Berlin, told The Insider that the break in cooperation between the companies may have been a formality:

“There have been no significant stoppages visible at gas metering stations in Slovakia or Austria. It raises the question: what is happening here? It’s possible that a Slovak trader is buying gas from Gazprom in Slovakia and then reselling it to OMV. This trader may also have ties to Gazprom.

If that’s the case, it means Gazprom Export only formally suspended its supplies to circumvent the court ruling. It is also quite likely that OMV fully understands the situation.

On one hand, OMV must publicly demonstrate its firm stance opposing Gazprom. On the other hand, buying Russian gas is economically beneficial for OMV. Austria’s gas consumption consisted of 90% Russian gas not due to a lack of alternatives, but because Gazprom offered the most attractive prices. Austria can source gas elsewhere; OMV has contracts for LNG that are enough to meet market needs. However, if cheaper Russian gas is available, OMV profits by selling relatively expensive Norwegian gas and LNG imported from terminals in Northwest Europe to other markets, avoiding additional transport costs to Austria. The contract with Gazprom, lasting until 2040, is both good and bad. It’s bad because breaking it could incur penalties, but beneficial if the war ends in the near future and sanctions are lifted, allowing gas purchases from Gazprom to resume under favorable terms.

The dispute’s scale is relatively small — slightly over a month’s payment under the contract (€213 million for November). However, the legal stance taken by Gazprom, supported by the Russian state, is to refuse arbitration rulings from unfriendly jurisdictions. Accepting OMV's proposed arrangement would undermine this principle for Gazprom. Even if Russian gas does stop flowing to Austria, an immediate crisis is unlikely. The weather remains mild, and storage facilities are full. This is sufficient to redirect flows, though it may come at a slightly higher cost.”

Gazprom’s decision to halt deliveries appeared to sever ties with one of its largest remaining European clients, as Gazprom Export stopped supplying Austria's OMV, which typically received 6 billion cubic meters annually. Austrian Chancellor Karl Nehammer announced the stoppage on Nov. 16.

​​The move came after Gazprom was fined €230 million — plus interest and legal costs — by an arbitration court last week for under-delivering gas through the Nord Stream pipeline in 2022. Even before the pipeline was sabotaged, gas supplies had been inconsistent, with Gazprom claiming turbine repairs and various technical issues as the cause of the interruptions. The court found these explanations inadequate to excuse breaches of contract.

Anticipating that Gazprom might not willingly pay the compensation, OMV reportedly considered deducting the amount from its current supply payments. In response, the Russian company chose to suspend deliveries that could go unpaid.

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