Russia has lost the global gas market for decades, the International Energy Agency says.
Data from Eurostat paints a similar pattern: in the first quarter of 2023, Russia was the EU’s second-largest supplier of LNG, only behind the United States and ahead of Qatar, Algeria, Norway and Nigeria.
Having cut off gas supplies to most European countries in a failed attempt to secure concessions on Ukraine, Russia has lost its share of the global gas market for decades.
With 30% of the global gas trade before the invasion of Ukraine, Russia will have only 15% by the end of the 2030s, the International Energy Agency predicts.
Russia’s chances of finding new markets to replace the European market, to which Gazprom pumped 150 billion cubic meters annually before the war, are extremely limited, the IEA report stated, as quoted by Bloomberg.
Attempts to negotiate with China to increase supplies and build the Power of Siberia-2 pipeline have so far failed. Back in March, during Chinese President Xi Jinping’s visit to Moscow, President Putin offered to increase exports to the Chinese market 6 times, up to 100 billion cubic meters per year, and claimed that the contract was in high readiness.
But neither in the spring, nor six months later, when Putin himself came to Beijing on a visit, any documents on the Power of Siberia-2 failed to be signed. Earlier, it took the Kremlin almost 10 years to persuade China to build Power of Siberia-1 with a capacity of 38 billion cubic meters per year.
Gazprom also has few chances to return to the European market: the Kremlin’s gas blackmail forced the EU countries to reduce their consumption and find new suppliers. Demand for gas in the EU will drop by 50 billion cubic meters per year by the end of the decade, the IEA forecasts.
“Gazprom has no prospects for the next 5 to 10 years,” Alexander Ryazanov, formerly the company’s deputy chairman, told Bloomberg. According to IFRS accounts, Gazprom suffered a more than one trillion ruble net loss from July 2022 to the end of June 2023 and was forced to cut gas production by a quarter, an all-time record high in the company’s history.
“Putin appears to have miscalculated when he cut off Europe,” said Maria Snegovaya, senior fellow at the Washington-based Center for Strategic and International Studies.
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