"Putin miscalculated": Russia's influence on the gas market will be halved by the end of the decade - Bloomberg

Russia has permanently lost its share of the global gas market after it cut off gas supplies to most European countries in a failed attempt to secure concessions on Ukraine.

Having held 30% of the world's gas trade before the invasion of Ukraine, Russia will have only 15% by the end of the 2030s, the International Energy Agency predicts.

Source. The agency's report is cited by Bloomberg.

Russia has so far been unable to find new markets to replace the European one, to which Gazprom supplied 150 billion cubic meters annually before the invasion.

Attempts to negotiate with China to increase supplies and build the Power of Siberia 2 pipeline have so far failed. Back in March, during the visit of Chinese President Xi Jinping to Moscow, Russian dictator Putin proposed to increase exports to the Chinese market by 6 times, to 100 billion cubic meters per year, and claimed that a new gas contract was in a high degree of readiness.

However, neither in the spring nor six months later, when Putin himself arrived in Beijing on a visit, were any documents on Power of Siberia 2 signed. Russia's attempts to enter the Asian gas market are fraught with "significant difficulties," the IEA states.

It took the Kremlin almost 10 years to persuade China to build Power of Siberia-1 with a design capacity of 38 billion cubic meters per year.

Negotiations on Power of Siberia-2 have been going on for eight years, but to no avail. According to Reuters, the stumbling block is the price of gas, which for China is already almost twice as low as for other Gazprom customers. In 2024, it will amount to $272 per thousand cubic meters, compared to $482 for Europe and Turkey.

Gazprom also has few prospects of returning to the European market: the Kremlin's gas blackmail has forced EU countries to reduce consumption and find new suppliers. Demand for gas in the European Union will decline by 50 billion cubic meters per year by the end of the decade, and then global consumption will begin to decline, the IEA predicts.

At the same time, European countries are already signing long-term contracts with LNG suppliers to buy gas outside of Russia for decades.

On October 18, QatarEnergy agreed with Shell to supply liquefied natural gas to the Netherlands for 27 years, a similar agreement on exports to France was concluded with TotalEnergies, and to Italy – with Eni.

According to the reports, from July 2022 to the end of June 2023, Gazprom received more than 1 trillion rubles in net losses, lost two-thirds of its cash reserves and was forced to cut gas production by a quarter, a record high in the company's history.

"By cutting off Europe from gas, Putin miscalculated," says Maria Snigova, a senior fellow at the Washington-based Center for Strategic and International Studies. "Most of the European market has been lost to Russia, and Gazprom's geopolitical influence is declining, as are Russia's ambitions to become a gas superpower."

Background. Meanwhile, Russian media reported that Gazprom will supply additional gas to Hungary and China next winter.