Russian gas cuts to Europe hurt economic hopes after grain deal with Ukraine

  • Gazprom says the turbine shutdown will further reduce gas to Germany
  • The United Nations expects to export cereals within days
  • US exploring land routes after Russian attack

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 economic pressures were expected to ease. after Russia agreed to Ukraine exporting grain from the Black Sea ports.

Ukraine’s first ships could set sail within 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.

Rising energy costs and the threat of hunger facing millions in the poorest countries show how Europe’s biggest conflict since World War II, 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 struck enemy targets. Russia’s defense ministry did not immediately respond to a request for comment after hours.

President Vladimir Putin warned the West earlier this month that the sanctions risked triggering a global spike in energy prices.

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

This is half of current flows, which are already only 40% of normal capacity. Before 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 problems 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, Ukraine’s state-owned pipeline operator said Russian gas giant Gazprom ( GAZP.MM ) has without warning sharply increased pressure on a pipeline that runs through Ukraine to deliver Russian gas to Europe. Read more

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

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

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

Europe’s politicians have repeatedly said Russia could cut off gas this winter, a move that would push Germany into recession and hurt consumers already hurt by rising inflation.

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

GRAIN SNAPS

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

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

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

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

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

Russia’s Black Sea Fleet has blocked Ukraine’s grain exports since Moscow’s February 24 invasion. Moscow blames Western sanctions for slowing its food and fertilizer exports and Ukraine for exploiting approaches to its ports.

Under Friday’s agreement, pilots will guide the ships through safe channels through naval minefields. Read more

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

Zelenskiy was adamant that trade would resume: “Let’s start exporting and let partners take care of security,” he said.

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

The Kremlin also said the United Nations must ensure restrictions on Russian fertilizer and other exports are lifted for the grain deal to work.

AIR ATTACK

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 act of unprovoked aggression.

Thousands of civilians have died and millions have fled during the war. Russian artillery bombardment and airstrikes have pulverized the cities.

With Western weapons pushing back on the Ukrainians, Putin’s forces are making slow progress but are believed to be preparing for a further push east.

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

Russia had no comment, but its defense ministry said its forces had destroyed a cache of ammunition for the HIMARS systems. Read more

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Reuters bureau reports; Written by Costas Pitas; Editing by Stephen Coates and Simon Cameron-Moore

Our standards: the Thomson Reuters Trust Principles.

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