And if you recall from a write up a few years back Russia promised not to take advantage like this. Who would’ve thought?

In any case it’s bad real terms of trade for euro zone gas buyers, but helps exports of whatever Russia buys with the inflated euro revenues, with export prices held down by austerity, etc.

EU Said to Draft Gazprom Complaint as Putin Prepares G-20 Talks

By Gaspard Sebag

August 26 (Bloomberg) — European Union regulators are drafting a formal antitrust complaint against OAO Gazprom, which supplies a quarter of the EUs natural gas, threatening to escalate a probe thats been attacked by Russian President Vladimir Putin.

Officials are working on a statement of objections against Russias state-owned gas export monopoly, according to three people familiar with the probe, who asked not to be named because the status of the inquiry is confidential.

A complaint over allegations that the company abused its dominant position in the gas market may be sent by the end of the year if Gazprom and the EU fail to open settlement talks, said one of the people.

A showdown with Gazprom risks inflaming relations with Russia just as Putin prepares to host a meeting of leaders from the Group of 20 nations next month in St. Petersburg. Russian Foreign Minister Sergei Lavrov warned this month that if the European Union imposes antitrust sanctions against Gazprom, it will be difficult for the company to operate in markets where it faces open discrimination.

The case has the potential to seriously disturb EU-Russia relations, said Thijs Van de Graaf, a researcher at the Ghent Institute for International Studies in Belgium. Gazprom is not a normal company in Russia. It does not only give account to its shareholders but also serves political goals.