(Moscow) – Shares of Gazprom, Russia’s state-owned energy giant, have dropped to their lowest level in over 16 years, marking a dramatic decline amid the ongoing economic struggles linked to Russia’s war in Ukraine. The company’s stock reached 106.1 rubles ($1.01) on December 17, 2024, following a 2.4% drop from the previous day. This marks a staggering 33.5% fall since the beginning of the year, reflecting the deepening financial challenges faced by the company.
The decline in Gazprom’s stock value follows a series of negative developments for the company, with the European Commission’s announcement that it is prepared to halt Russian gas transit without significantly impacting gas prices. The statement confirmed that alternative supply sources are now available, further isolating Russia’s energy exports. Gazprom’s profits have suffered greatly due to this sharp decrease in European exports, which have fallen by more than 80% compared to 2021.
The company also faced additional pressure as Austrian oil and gas company OMV recently ended its long-term gas supply contract with Gazprom. This move further erodes Gazprom’s ability to generate revenue from its primary gas export market, Europe.
Meanwhile, the Russian government has continued to heavily tax Gazprom’s revenues, with the company having paid $28 billion in taxes to the government in 2023 alone. This payment accounted for 9% of Russia’s total government revenue for the year, highlighting Gazprom’s crucial role in financing the Kremlin’s activities, including its war efforts.
Oleg Abelev, head of the analytical department at Rikom-Trust investment company, has predicted that Gazprom’s share price will likely remain between 100 and 115 rubles ($0.96-$1.10) in the near future. This prediction further underscores the ongoing financial struggles for the Russian energy sector as international sanctions and declining demand take a severe toll.
| Date | Event | Details |
|---|---|---|
| Dec 17, 2024 | Gazprom’s Share Price Falls | Shares dropped to 106.1 rubles ($1.01), a 33.5% decline from the start of the year. |
| Dec 2024 | Decline in European Exports | European exports of Gazprom’s gas fell by 80% compared to 2021. |
| 2023 | Tax Payments to Russian Government | Gazprom paid $28 billion in taxes, accounting for 9% of government revenue. |
This financial slump comes as Russia’s reliance on energy exports to Europe has been severely disrupted, forcing the Kremlin to look for alternative sources of revenue. However, with Europe seeking energy independence and Gazprom facing mounting challenges, it seems clear that the Russian energy sector is heading for a prolonged period of instability.
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