Russian exports of natural gas to Europe have reached their lowest levels in 50 years, leaving the state-owned energy company Gazprom with billions of cubic meters of unsold gas, further exacerbating the financial pressures on one of the Kremlin’s key economic pillars.
From January to June, Gazprom delivered only 8.33 billion cubic meters of gas to European customers, as reported by Reuters, which compiled data from TurkStream, the only remaining operational pipeline connecting Russia to Europe.
This marks a 47% decline compared to the same period in 2023 and indicates that Russia is likely to supply under 16 billion cubic meters to Europe this year. This figure is a significant drop from the 175 billion cubic meters exported in 2021, prior to the Ukraine invasion, which disrupted the energy dynamics between Moscow and the West.
Russia’s gas exports to Europe have not been this low since the early 1970s.
By 1975, the Soviet Union was already exporting 19.3 billion cubic meters annually to Europe. Just five years later, following a pivotal pipeline agreement with West Germany, exports skyrocketed to 54.8 billion cubic meters.
The current decline is primarily due to Western sanctions, geopolitical tensions, and the breakdown of Gazprom’s traditional export networks.
Most pipeline routes through Ukraine and Poland have been either severed or dismantled, and the existing liquefied natural gas (LNG) facilities are inadequate to offset the lost volumes.
The Russian government’s much-touted Turkish gas hub, introduced in 2022 as a strategy to circumvent sanctions, has not developed into a viable alternative.
Consequently, Gazprom is left with an excess of gas that it cannot market. Out of the 416 billion cubic meters that the company produced in 2024, only 355 billion were sold, resulting in approximately 60 billion cubic meters of unsold gas — comparable to the total annual production of the United Arab Emirates.
Attempts to redirect exports have met with limited achievements. The Power of Siberia pipeline to China, which began operations in 2019, currently supplies about 20% of the volumes that were previously sent to Europe.
Negotiations for a second pipeline are currently at a standstill, and the broader strategy of shifting focus to Asian markets has turned out to be more complex and time-consuming than Moscow had expected.
With few alternatives, Russian authorities are rushing to find domestic applications for the surplus gas.
The Ministry for the Development of the Far East has suggested utilizing the surplus to support data centers and AI initiatives.
The Energy Ministry has proposed aiding the struggling coal industry, which requires gas-fired power plants near mining sites.
Additionally, the Kremlin is contemplating supplying 55 billion cubic meters of gas per year to Iran, a nation that already has the second-largest reserves globally and oversees the South Pars field, the largest in the world.
Financially, Gazprom is under increasing pressure. In 2023, the company reported a loss of 629 billion rubles ($8.2 billion) according to international financial reporting standards. Although it returned to profitability in 2024 with a net profit of 1.2 trillion rubles ($15.6 billion), its core gas operations still reported a loss of 1 trillion rubles ($13 billion).
Looking forward, the outlook could become even more challenging.
A confidential forecast from Gazprom obtained by the Financial Times anticipates cumulative losses reaching up to 15 trillion rubles ($195 billion) over the next decade if export opportunities do not improve.
This projection suggests a decade of negative cash flow, a scenario that could significantly hinder the Kremlin’s broader economic ambitions.
