Gazprom, Russia’s state-owned gas giant, is now struggling to make any profits due to the unforeseen circumstances caused by Russia’s decision to halt most of its gas deliveries to the EU in 2022. At the time, this move was intended to allow Russia to earn more despite lower export volumes, but it had immediate consequences for Europe which heavily relied on Russian gas for energy.
In 2021, 40% of Europe’s gas came from Russia and as a result of the gas shortage that year, Europe anticipated inflation and possible blackouts. However, two years later in 2023, Europe’s gas tanks are fuller than ever thanks to mild winters and increased imports of liquefied natural gas (LNG) from America. This has allowed European countries to find alternative sources of gas and keep their tanks full without relying on Russian imports.
Redirecting the 180 billion cubic meters of gas that Russia once sold to Europe was always going to be a challenge. Despite having strong oil sales remaining strong despite sanctions between 2018 and 2023, Russia lacked the infrastructure and technology needed to ship its gas exports elsewhere than Germany through Nord Stream pipeline or LNG facilities and tankers. The unintended consequences of cutting off natural gas supplies have left Gazprom struggling financially while also reducing the impact of Russia’s actions on Europe’s energy supply.
