Due To the Russia-Ukraine War, in 2023 The Income Of “Gazprom” Will Decrease Significantly

Due To the Russia-Ukraine War, in 2023 The Income Of “Gazprom” Will Decrease Significantly

By Nika Chitadze, Professor of the International Black Sea University, Director of the Center for International Studies

Based on various data, it can be said that low gas prices worsened the forecast of “Gazprom” revenues. We are talking about the income received from the European sales of the energy giant controlled by the Kremlin.

In particular, if Russia maintains stable gas exports to Turkey, this year sales will reach 22 billion cubic meters, and in Europe 28 billion cubic meters. In this case, according to Reuters’ calculations, Gazprom’s revenues from European sales will decrease from $52 billion in 2022 to $12.5 billion this year.

Gazprom’s sales in Europe, once a major source of foreign currency earnings, have fallen sharply as a result of the crisis in relations between Moscow and the West. In particular, according to Reuters calculations, gas exports through Russian pipelines to Europe for the first half of the year fell to approximately 12.1 billion cubic meters, while in the whole of 2022, it was 62 billion cubic meters. This indicates a potentially serious downturn this year.

According to the agency’s assessment, the decrease in export revenues may increase the budget deficit of Russia, which already amounts to 117% of the annual plan. This is due to the large costs of Moscow’s military campaign in Ukraine, as well as Western sanctions on Russian oil and gas exports.

“Gazprom” itself has not yet made a forecast for this year’s exports. The company did not respond to Reuters’ request either.

Ronald Smith, a seasoned analyst at BCS, a Moscow-based brokerage, expects 1,000 cubic meters of Russian gas to cost an average of $445 in Europe this year, compared with $830 in 2022, according to the Federal Economy Ministry. According to Smith’s forecast, Russian gas exports to Europe and Turkey will reach 50 billion cubic meters this year.