(Bloomberg) -- Russia is ready to help stabilize global energy markets and could export record volumes of natural gas to Europe this year, said President Vladimir Putin.
He spoke as the continent’s gas and power prices were breaking fresh records, with the impact rippling through equity and bond markets while the European Union sounded the alarm. Lower-than-anticipated supplies from Russia, the region’s largest supplier, have been a major cause of the crisis, according to some European officials.
Exports from Gazprom PJSC to Europe in the first nine months of the year were close to all-time highs, according to the company. If that pace is sustained for the rest of 2021, it would be a record year, Putin said at an energy meeting on Wednesday.
“Russia has always been and is a reliable supplier of gas to its consumers all over the world –- both to Asia and to Europe, and always fulfills all its obligations in full,” Putin said. “All of them, I want to emphasize this.”
Putin asked his government and energy executives for proposals on how to stabilize the energy market, adding that this work should be “built on an absolutely commercial basis, taking into account the interests of all participants in this process.”
More gas from Russia would be a relief for Europe, where sky-high energy costs are stoking inflationary pressures and fueling concern that economic growth will slow. Putin’s statements have already cooled European gas prices after they jumped as much as 40% earlier on Wednesday.
Read also: European Gas Erases Gains as Putin Says Supply May Reach Record
Gazprom’s daily exports to Europe were close to record volumes earlier this year, but they fell in September amid increased domestic demand due to an early start of the heating season. The company also continues its storage-injection campaign at home, which is scheduled to end by Nov. 1, and expects a cold winter.
The recent drop in Russia’s exports, which meant lower supplies through transit routes via Ukraine and Poland, sparked criticism that the country is withholding supplies to force faster approval of its controversial Nord Stream 2 pipeline.
Gazprom says it’s meeting all contractual obligations. Putin said Gazprom will send more gas via Ukraine than it’s contracted to this year, based on the first nine months of supply.
Read also: Why Nord Stream 2 May Not Be Ready in Time for Winter in EU
Putin said the current situation was the result of a faster economic recovery around the world that has “warmed up” demand for energy, while an unexpectedly long and cold winter depleted Europe’s gas storage. Putin also mentioned a “mistake” made by European authorities to shift from long-term contracts to spot gas sales.
“Today it has become absolutely obvious that this policy is erroneous,” Putin said. “As a result, now the gas price has broken all historical records and today it’s already striving to $2,000 dollars per 1,000 cubic meters.”
(Updates with gas-market reaction, details on Gazprom’s exports from sixth paragraph.)
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