Gazprom is struggling with record losses: what does this mean for Europe?

Gazprom is struggling with record losses: what does this mean for Europe?

Gazprom posted a net loss of 1.076 trillion rubles, equivalent to about $12.89 billion, in 2024 under Russian accounting standards. This represents a significant setback for the company, which has come under significant pressure due to Western sanctions.

The main reason for the losses is the decreased market value of shares in Gazprom Neft, a subsidiary of the group. The decline in European gas imports, as many trading partners forego Russian gas, has also had a severe impact on Gazprom's financial situation. In the spring of 2024, Gazprom had already reported a net loss of 629 billion rubles (about 6.4 billion euros), which represents the first net loss since 1999, as Mirror Online reported.

Follow-up actions and plans

In view of the negative financial development, Gazprom Neft plans to increase oil production from April 2025 in order to meet the requirements of the OPEC+ agreement. The company also intends not to reduce oil refining in 2025 and increase investment to strengthen resilience to sanctions.

The group's problems are compounded by a dramatic decline in the share price. In December 2024, it fell to a new low of 106.1 rubles and was 105.75 rubles on Wednesday. Gazprom also announced that it would cut around 1,600 jobs, particularly at its headquarters in Saint Petersburg. Deputy CEO Elena Ilyukhina called for a reduction in the headquarters workforce from 4,100 to 2,500 employees.

Another critical point is the end of a significant gas supply contract between Gazprom and a Ukrainian operator at the end of 2024, which affects gas shipments through Ukrainian pipelines to the EU. European countries such as Austria, Slovakia and Hungary are affected. In the Transnistria region, the end of the transit agreement has also led to a significant energy shortage Merkur.de reported.