The nine-month increase in exports occurred because of a number of factors:
- The first months of 2021 were relatively cold. According to data from Germany’s Weather Service (DWD), average temperatures in Germany in January were 2.7 degrees Celsius lower than in January 2020. For February, the difference amounted to 3.5 degrees Celsius and for March, 0.7 degrees Celsius. As a result, European gas storage facilities were filled to 30.3 % of capacity (against 54.2 % a year earlier, according the calculations of Gas Infrastructure Europe).
- The recovery by the European economy stimulated demand for gas. According to data from IHS Markit, in 2021, the PMI Manufacturing Index for the euro zone, which reflects the dynamics of processing sectors of industry, did not once fall to lower than 50 points – the dividing line between growth and recession. In 2020, the index fell to less than 35 points. As a result, in the first quarter of 2021, demand for gas in the European Union climbed by 7.6 % year-on-year and in the second quarter it rose 18.9 % according to data from the EU’s Executive Commission (more recent data not available).
- Suppliers of liquefied natural gas (LNG) reoriented their shipments to Asian markets. Over the first nine months of 2021, Asia’s four biggest consumer countries – China, Japan, South Korea and India – increased their imports of LNG by 11 % (to 253.7 billion cu.m., Refinitiv reported). To a great extent, And that is because, despite increased demand, Europe reduced its imports of LNG for the same period by 13 % (to 87.8 billion cu.m.).
This could only stimulate demand for Russian pipe-delivered gas. And in the fourth quarter, exports could be even more significant, given that in November, the company boosted its supplies through the Ukrainian transit route. From 9th November, daily transit volumes through Ukraine did not fall below 100 million cu.m., though on the 1st of the month, the total amounted to 56 million cu.m.
The same dynamic is typical of daily volumes through the Yamal-Europe gas pipeline, which passes through Belarus. From 18th November, volumes did not dip below 50 million cu.m. – though in the first week of November, it only twice exceeded 25 million cu.m., according to Gazprom figures.