The consequences of Gazprom ceasing gas supply

The legal dispute between OMV and Gazprom could have significant implications for OMV’s trading subsidiary. If ordered to make payments to the injured European energy company instead of Gazprom, OMV may face challenges in receiving Russian gas deliveries. This could potentially lead to a cessation of deliveries from Gazprom if payments are not made.

In the event of Russian gas delivery failure, OMV has secured alternative transport capacities in the European gas network. They have reassured customers that they can supply gas from their own production in Norway and liquefied gas imports. While OMV does not have a monopoly or supply mandate for Austria, they, along with other energy companies, have prepared for possible delivery failures over the past two years.

From the current perspective, supply should not be at risk. Storage tanks hold more than a year’s supply and are 77 percent full. Alternative import routes through Germany and Italy provide additional options for gas supply. Rising gas prices and a German storage levy may result from a delivery failure, impacting imports from Germany.

Despite the legal dispute, OMV continues to purchase Russian gas as committed in 2018 until 2040. International arbitration courts have been involved in resolving disputes between OMV and Gazprom. The recent ruling by the Russian court against OMV’s trading subsidiary could result in fines if the proceedings continue.

While OMV does not recognize the jurisdiction of the Russian court, Gazprom could take action against EU companies in Russia and third countries based on the rulings. The legal dispute between OMV and Gazprom has the potential to disrupt gas supply and impact gas prices in Austria.