MOSCOW: Russian energy giant Gazprom has reported a financial loss for the first time in more than 20 years, Western media reported on Wednesday.
According to analysts, the multi-billion-dollar loss is a sign that Western sanctions are negatively affecting the Russian economy.
The company is running a $7 billion deficit because of a sharp drop in trade with European nations and sanctions imposed after the war in Ukraine.
Gazprom and the Russian economy have fought the sanctions by turning to China and India but have failed to get compensation for the lost European markets.
The company’s problems show the limitations of Moscow’s partnership with Beijing China, according to a report.
The problems persist despite Moscow’s smart response to sanctions, with the country known to divert its gas exports to other buyers.
In 2022, the first year of the war, it transported some 63.8 billion cubic meters of gas to Europe. Last year, this fell further by 55 percent to 28.3 billion cubic meters.
In 2018 Gazprom exported more than 200 billion cubic meters of gas to the EU and other nations such as Turkey.
Russia, which is turning to China to avert the West’s moves, is aiming to enhance pipeline gas sales to 100 billion cubic meters a year by 2030 through the Power of Siberia pipeline and its new planned branch.
The goal for this year is only 38 billion cubic meters, while pipeline No. 2, which is not yet functional and will pass through Mongolia, will export 50 billion cubic meters.
However, exports to China will not be a smooth process for Russia.
Kateryna Filippenko, director of gas and LNG research at Wood Mackenzie said although Gazprom will have some additional export revenues, it will not be able to fully compensate for the lost business in Europe.
