Russian Gas Exports Sink To 1985 Levels As Europe Turns To New Sources

Gazprom, once a dominant player in the global gas market, faces a stark reality as it grapples with the consequences of Russia’s geopolitical maneuvers. The Russian gas monopoly’s attempt to leverage energy supplies in the Ukraine conflict has backfired, resulting in a severe contraction of its export market and financial stability.

In a dramatic setback, Gazprom’s gas exports have plunged to their lowest level since 1985, reaching only 69 billion cubic meters in 2023. This represents a drastic reduction from the 185 billion cubic meters exported in the pre-war period of 2021 and a significant drop from the already troubling figures of 2022, which amounted to 100.9 billion cubic metres. The company’s European market, which previously accounted for 80% of its exports and two-thirds of its revenue, has dwindled to a fraction of its former volume.

Europe’s shift away from Russian gas, a reaction to the Ukraine conflict, has left Gazprom with a diminished presence in its most lucrative market. Its exports to Europe have regressed to levels last seen in the 1970s, starkly contrasting with the heights reached in previous decades. Despite efforts to pivot towards China, the gains made through the Power of Siberia pipeline are insufficient, covering merely an eighth of the lost European Union exports.

Gazprom’s hopes are now pinned on expanding its Chinese market, proposing a fivefold increase in sales. However, these ambitions face significant challenges. China’s demand for imported gas is expected to grow by only 80 billion cubic meters by 2030, with contracts already in place for supplies from other sources.

The impending expiration of Gazprom’s transit contract through Ukraine in 2024 further complicates the picture, potentially exacerbating the decline in European supplies. Experts like VEB chief economist Andrei Klepach are skeptical of Gazprom’s ability to recoup these massive losses, even with planned contracts with China.

Compounding these export challenges, Gazprom faces tough negotiations with China over the proposed Power of Siberia-2 pipeline. China’s insistence on heavy discounts and refusal to share construction costs puts additional strain on Gazprom’s already weakened financial position.

To mitigate these financial pressures, Russian authorities are resorting to significant domestic gas tariff hikes, further burdening its citizenry. Once newly proposed hikes are complete, the tariffs will have risen by 34% since the start of the war. These measures, however, may not suffice to offset the looming trillion-ruble losses anticipated by energy committee head Pavel Zavalny, as Gazprom navigates a landscape of shrinking exports and escalating costs.


Information for this briefing was found via Reuters, Moscow Times, and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

Video Articles

America Uses More Copper Than It Makes | Simon Quick – Canadian Copper

Gold Bulls Run Faster Than New Mines?! | Thomas Mumford – Scottie Resources

Is This the Start of a New Gold Rush | Russell Ashton – Juggernaut Exploration

Recommended

ESGold Secures $9 Million In Non-Dilutive Funding From Ocean Partners

Altamira Gold Encounters Porphyritic Intrusive Rocks In Initial Scout Drilling At Regional Targets

Related News

Is Russia Desperate for Foreign Currencies? Putin Partially Lifts Decree Requiring Ruble-Only Payments for Natural Gas

It appears that Russia’s energy giant Gazprom might be having trouble finding buyers for its...

Monday, January 9, 2023, 06:09:00 AM

Canada Returns Repaired Russian Turbine As Nord Stream Undergoes Maintenance

Canada has completed repairs and sent back a Russian turbine crucial for the shipment of...

Monday, July 18, 2022, 04:52:00 PM

Russia Stops Gas Flow to Austria in Payment Dispute

Russia’s Gazprom halted natural gas supplies to Austria on Saturday in a payment dispute, marking...

Monday, November 18, 2024, 02:09:00 PM

Gazprom Threatens Total Energy Export Halt… Again

The chief of the state-owned Gazprom threatened to cease gas supply to the European Union...

Monday, October 17, 2022, 11:58:00 AM

Gazprom Missed 2021 Natural Gas Export Targets as Europe Underwent Massive Energy Supply Shortage

Russian-owned gas company Gazprom failed to meet its own European export targets for 2021, which...

Tuesday, January 4, 2022, 04:24:00 PM