Russia’s pipeline gas exports are set to halve this year, according to a report from a Kremlin-affiliated news outlet. Those losses are largely due to Russia slashing pipeline gas flows to Europe last year in retaliation for sanctions. But Russia’s economy is now struggling as it pulls in lower energy revenue, experts say. Loading Something is loading.
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Russia’s pipeline gas exports could fall by 50% this year, another sign that the nation’s dominance in global energy markets is fading as it struggles to find customers for its products.
Government forecasters predicted the Russia’s pipeline gas exports could halve in 2023, the Kremlin-affiliated Russian news outlet Izvestia reported on Thursday. That will pile on to hefty losses Russia’s gas industry already weathered in 2022, with state-owned Gazprom reporting the lowest volume of gas exports last year since the start of the century.
The hole in Russia’s gas trade stems from the nation halting key pipeline flows to Europe in mid-2022 in retaliation for Western sanctions. The move was expected to exacerbate the supply shortage and push up energy prices for the West, but its efforts to weaponize gas have largely backfired, experts say, as it’s been difficult for Russia to find other customers for its gas supplies.
The nation did ramp up its LNG exports to Europe last year as it slashed pipeline gas supplies, but European nations are now considering banning Russian LNG to further crimp the nation’s war revenue. The European Union’s energy commissioner asked the 27-country bloc not to renew Russian LNG contracts last month, a move that could bring more headwinds to Russia’s economy.
Russia’s oil and gas revenue crashed nearly 50% in January of this year alone, according to estimates from Russia’s finance ministry. And despite more positive economic stats touted by the Kremlin, sanctions have dented Russia’s economy far more than it will admit, two Yale researchers said, who claimed the nation’s economy is actually “imploding” amid its costly invasion of Ukraine.