Russia’s state-backed gas supplier has lost a significant European contract, dealing a setback to Vladimir Putin’s war-driven economy.
Austria’s OMV terminated its long-term agreement with Gazprom after a protracted legal dispute over supply disruptions that began in 2022 following Russia’s invasion of Ukraine.
OMV was one of the last major, long-term purchasers of Russian pipeline gas in Europe. Gazprom saw most of its European customers exit the market in response to Putin’s military actions.
Prior to the conflict, Russia was Europe’s largest natural gas supplier.
The dispute between OMV and Gazprom reached a critical point last month when an arbitration panel awarded OMV €230 million (£190 million).
However, due to sanctions imposed on Gazprom, OMV faces challenges in recovering the funds. Instead, OMV proposed withholding payments for the ongoing gas supplies from the Kremlin-backed company.
In response, Gazprom promptly ceased gas deliveries, causing European gas prices to spike to their highest levels in a year.
On Wednesday, OMV officially terminated the contract with immediate effect.
