Gazprom is struggling: record losses and a dangerous future!

The situation at Gazprom, Russia's largest energy company, continues to worsen. In 2024, the company recorded a net loss of 1.076 trillion rubles, which is the equivalent of about $12.89 billion. This is a dramatic decline, due in particular to the decreased market value of shares in Gazprom Neft, a subsidiary. Western sanctions have significantly weakened the Russian energy sector and led to a loss of importance on the international market, such as Mercury reported.

In addition, Gazprom Neft has decided to increase oil production from April 2025 in order to comply with the OPEC+ agreement. The company plans to increase investments without reducing oil refining. Gazprom's share price recently fell to a new low of 105.75 rubles. This development follows the announcement of a net loss of 629 billion rubles in 2023, marking the first loss since 1999, as daily news reports.

Background of the losses

Dramatically reduced gas deliveries to Europe, previously an important source of revenue for Gazprom, are a central factor in the losses. In 2021, European countries still purchased 40% of their natural gas from Gazprom, while this share fell to just 8% in 2022. This is due, among other things, to the damage to the Nord Stream pipelines, which was allegedly caused by sabotage in September 2022. In view of the associated financial burdens, Gazprom is trying to open up new sales markets, especially in Asia.

The end of a major gas supply contract between Gazprom and a Ukrainian operator at the end of 2024 has also led to an energy shortage in the Transnistria region, affecting gas supplies in countries such as Austria, Slovakia and Hungary. To counteract the drastic changes, Gazprom announced it would cut around 1,600 jobs, primarily at its headquarters in Saint Petersburg, reducing its workforce from 4,100 to 2,500 employees.