Europe deflates Russia’s gas business and volumes
Russia's revenue from gas sales to the European Union collapses. Gazprom itself, controlled by the Kremlin, admits the crisis: production and overall exports are falling. Data and analysis by Matteo Villa (Ispi)
Russia's economic revenue from the sale of natural gas to the European Union, its main destination market before the invasion of Ukraine, is now one third of its pre-war level. A collapse that the ISPI analyst Matteo Villa defined as "an historic result".
THE ADMISSION OF GAZPROM
Even Gazprom, Russia's government-controlled gas company, admitted that 2022 was a "very, very difficult" year.
Exports via pipeline to countries that did not belong to the Soviet Union amounted to approximately 100.9 billion cubic meters, 45 percent less than the volumes of 2021 (185.1 billion) and the lowest value since 1995.
Production levels have also dropped a lot, going from 514.8 billion cubic meters in 2021 (the maximum in thirteen years) to 412.6 billion last year.
CHINA (AND WHOLE ASIA) ARE NOT ENOUGH TO COMPENSATE
Russian gas exports to Asia, and in particular to China, although increased, were not enough to compensate for the decrease in European revenues. Full replacement was not possible due to volumes (linked to the transport capacity of the plants) or sales prices (Moscow has agreed to deliver the fuel to Beijing at a heavy discount).
– Read also: Why Russia will not be able to replace Europe with China on gas
In short, Russia does not seem to be able to replace the European market with the Chinese one, as can be seen from another graph released by Villa. The European Union also intends to eliminate hydrocarbon imports from Moscow, historically its largest supplier, by 2027.
For those who continue to comment: eh, Russian gas exports to Europe will also collapse, but China? Asia?
Here's the chart for you, which includes China and all of Asia. pic.twitter.com/SsAKXhIptI
— Matthew Villa (@emmevilla) January 26, 2023
HOW IS (BAD) RUSSIA, BETWEEN GAS AND OIL
Finally”, concludes Villa, “for those who: 'Russia gained a lot last year, it will take years before they begin to suffer'. Despite tripled revenues, Moscow ended 2022 with the highest deficit in 20 years. The earnings have already been "eaten up". Everything else will be deadweight loss”, explains the analyst.
The situation, for the Kremlin, is not positive even on the oil front. Finance Minister Anton Siluanov said recently that the drop in oil revenues due to the price cap and large military expenditures for the war on Ukraine could have the effect of widening the budget deficit for 2023, set at 2 percent of GDP.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/energia/russia-gas-crollo-entrate-unione-europea/ on Mon, 30 Jan 2023 06:29:08 +0000.