Russia was Europe’s second-largest gas supplier in May

Russia rose to second place in terms of gas supplies to the European market in May. According to the Financial Times, this happened for the first time since 2022. Russia’s share of the EU market was just under 15% for the whole of last year, compared with more than 40% in 2021. Norway held the position of the EU’s largest gas supplier last year, followed by the US. Lower gas consumption across Europe is helping to fill storage facilities, which are therefore at very healthy levels.

Russia became Europe’s second-largest gas supplier on a monthly basis for the first time since September 2022, while Norway continues to hold the position of the largest supplier. This includes supplies to Switzerland, Serbia, Bosnia and Herzegovina and other countries, rather than only EU member states. In May, Russian supplies accounted for 15% of total volumes delivered. Although this does not represent a significant increase in percentage terms compared with the whole of last year, the current situation has surprised some analysts.

"It is striking to see the market share of Russian gas, including LNG, in Europe rising after everything we have been through, and despite efforts to decouple from these supplies," Tom Marzec-Manser, head of analytics at consultancy ICIS, told the Financial Times.

The US was Europe’s third-largest gas supplier, through deliveries of liquefied natural gas (LNG). The US supplied 14% of total imports. This was its lowest share since August 2022. Lower supplies from the US were also caused by an outage at one of its main export terminals.

However, gas demand across Europe remains relatively low, meaning that underground gas storage levels are very healthy. A comparison with previous years can be seen in the chart below. In Czechia, for example, gas consumption continues to decline year on year, even though last year’s consumption was the lowest in more than three decades.

Analysts also note growing flexibility in terms of potential gas supplies to the EU. New export terminals are being commissioned, while the EU is building new import terminals. It is therefore no longer nearly as dependent on supplies through pipelines from Russia as it was when the Russian aggression against Ukraine began.

Nevertheless, some dependence remains – LNG supplies are also mainly contested with Asia, and the law of supply and demand applies in the market. At the end of the year, the agreement between Russia and Ukraine on gas transit to Europe via Ukraine will also expire, which could affect the supply side. The future of this transit has not yet been decided.