Russia Tightens EU Gas Grip as It Rejects Extra Ukraine Transit

© Reuters. Russia Tightens EU Gas Grip as It Rejects Extra Ukraine Transit

(Bloomberg) -- Russia again tightened its grip on Europes natural gas supply, rejecting an offer from Ukraine to book more transit capacity to compensate for reduced flows through a key pipeline to Germany.

Russias Gazprom PJSC (OTC:OGZPY) opted not to reserve extra space to ship gas to Europe through Ukrainian pipelines for July at an auction on Monday, booking results show. Its another sign that supplies from Moscow may remain curbed for weeks after the nation cut fuel shipments through the Nord Stream pipeline, its biggest gas route to the European Union, to just 40% of its capacity.

The squeeze caused gas prices to surge, adding pressure to EU member states already battling with surging inflation. Germany has called Russias supply cuts politically motivated and not due to technical issues, as Gazprom (MCX:GAZP) stated.

Read also: Gas Rationing Gets Closer for Europe as Putin Squeezes Supplies

Gas supply next month could be even tighter as the Nord Stream pipeline is scheduled for a complete shutdown for several days due to annual works. Ukraine has on numerous occasions called for Gazprom to increase flows via the Sudzha cross-border point to ramp up supply to Europe. The Russian company can still book additional space via Sudzha through daily capacity auctions, an option it hasnt used so far this month.