Historic Collapse: Russias Natural Gas Exports to Europe Reach Record Low Amidst Sanctions and Political Strife

Russian natural gas exports to Europe have plummeted to their lowest levels in fifty years, leaving the state-run energy corporation Gazprom with billions of cubic meters of unsold gas and exacerbating financial difficulties for one of the Kremlin’s key economic pillars.

From January to June, Gazprom exported merely 8.33 billion cubic meters of gas to European customers, according to data compiled by Reuters based on daily reports from TurkStream, the last active pipeline linking Russia to Europe.

This marks a 47% decline compared to the same timeframe in 2024 and indicates that Russia may fall short of delivering 16 billion cubic meters to Europe this year. This is a stark contrast to the 175 billion cubic meters shipped in 2021, prior to the Ukraine invasion, which disrupted energy relations between Moscow and the West.

The last time Russian gas exports to Europe were this low was in the early 1970s.

By 1975, the Soviet Union was already exporting 19.3 billion cubic meters annually to Europe. Just five years later, following a significant pipeline agreement with West Germany, exports had jumped to 54.8 billion cubic meters.

The current decline is primarily due to Western sanctions, political tensions, and the collapse of Gazprom’s traditional export routes.

Many pipeline routes through Ukraine and Poland have been severed or shut down, while liquefied natural gas (LNG) facilities are insufficient to make up for the lost supply.

The Kremlin’s ambitious Turkish gas hub, announced in 2022 as an alternative to sanctions, has not yet become a viable option.

Consequently, Gazprom is left with gas it cannot sell. Of the 416 billion cubic meters produced in 2024, only 355 billion were sold, resulting in around 60 billion cubic meters left unused — approximately equivalent to the entire annual output of the United Arab Emirates.

Attempts to redirect exports have seen only modest success. The Power of Siberia pipeline to China, which started operating in 2019, now transports about 20% of what was once exported to Europe.

Discussions regarding a second pipeline are stalled, and the prospect of shifting focus to Asian markets is proving more complex and time-consuming than Moscow expected.

With limited alternatives, Russian officials are urgently seeking domestic applications for the surplus gas.

The Far East Development Ministry has suggested utilizing the excess supply to power data centers and AI initiatives.

The Energy Ministry has proposed bolstering the struggling coal industry, which requires gas-fired power plants near mining facilities.

The Kremlin is even contemplating the export of 55 billion cubic meters of gas annually to Iran, a nation that already possesses the world’s second-largest gas reserves and manages the South Pars field, the largest gas field globally.

Financially, the pressure on Gazprom is increasing. In 2023, the company reported a loss of 629 billion rubles ($8.2 billion) according to international financial reporting standards. Although it returned to profit in 2024 with a net profit of 1.2 trillion rubles ($15.6 billion), its core gas operations still suffered a loss of 1 trillion rubles ($13 billion).

Looking forward, the situation could worsen even further.

A confidential forecast from Gazprom, obtained by the Financial Times, predicts cumulative losses could reach up to 15 trillion rubles ($195 billion) over the next decade if export opportunities do not improve.

This projection reflects a decade of negative cash flow, a scenario that could significantly jeopardize the Kremlin’s broader economic goals.