The termination of a more than 50-year gas supply contract between Russia's Gazprom and Austria's OMV Group is a heavy blow to Gazprom's long-standing economic and political influence in Central Europe, according to Reuters.
OMV Group is one of the few European customers to continue buying Russian gas from Gazprom after Moscow lost most of its European customers since the outbreak of the Ukrainian conflict.
Previously, Austria was almost completely dependent on Russian gas and was one of Gazprom's loyal customers. During the energy crisis in 2022, Austria saved billions of dollars by importing gas at preferential prices from Gazprom.
However, recently, the two groups have officially terminated their trading contracts. This comes from many reasons, including allegations of breach of contract and reasons related to the economic and political situation.
According to Reuters, the contract termination occurred when the Austrian corporation "held" Russian gas money to pay the arbitration award fee.
On November 13, OMV said it had won an arbitration case against Gazprom in Germany - accusing the Russian corporation of providing irregular gas supplies to OMV's German branches - with a compensation of 230 million euros ($239 million). OMV also announced that it will make a decision on the invoices for the Gazprom contract.
Reuters sources said that OMV "reversed" $239 million in gas delivered in October to pay the arbitration award fee. This is the first time an EU customer has failed to pay for gas to Gazprom.
Just three days later, Gazprom stopped supplying gas to the Austrian company. Gazprom considered OMV's " depreciation" of $239 million as non-payment and therefore stopped the supply.
Meanwhile, OMV argued that Gazprom's suspension of supplies was a breach of contract. OMV spokesperson said the transaction had stopped and the company did not expect the situation to change. The person also declined to comment on its future relationship with Gazprom.
This event marks the end of an important phase in the energy relationship between Russia and Austria. However, it is reported that, despite stopping direct distribution to Gazprom, Austria still receives Russian gas via the SPP, a third company from Slovakia. SPP is considered a gas transit point between the two groups from Russia and Austria. Currently, all three have refused to comment on this arrangement.
In fact, withdrawing from the contract with Gazprom has always been part of Austria's policy. In 2021, after taking office, Mr. Alfred Stern, CEO of OMV, began the first steps to reduce dependence on Russian gas. Energy Minister Leonore Gewessler also affirmed: "Our task is to create conditions for withdrawal from the contract to become feasible."
In the context of the tense political and economic relations between Russia and Austria, Austrian Prime Minister Karl Nehammer accused Russia of using energy as a weapon.
According to Reuters, OMV's end of Russian gas imports is not only an economic move but also a strong political signal. Although this still faces many challenges, this is a major turning point in the context of the EU trying to escape dependence on Russian energy.
