June 16, 2024

The Gazprom logo

The Gazprom logo
Photo: Anton Vaganov (Reuters)

The invasion of Ukraine is destabilizing Russia’s energy sector in more ways than one. The Financial Times writes that Gazprom commissioned a report on its future, and the news is grim. The newspaper says the fossil-fuel giant’s export revenues have suffered in the two years since the war began, and they might not recover for a decade.

Russian energy supplies have been broadly sanctioned by the European Union, the United States, and their allies. The price paid for European imports of Russian crude oil have been capped, reducing the money that can be made there. And Russian natural gas, which has generally been a major energy source for the E.U., is being consumed less and less as countries in the bloc seek to get the commodity elsewhere — namely from the United States.

Russia has made up for some of its reduced fossil fuel stature by increasing exports to India and China; its military spending is also helping to make up for domestic economic damage that would be felt more strongly by its populace otherwise. But without access to its old customers (and their infrastructure technology, the FT says) it will be difficult for the sector to stage any sort of comeback.

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