Russia downgrades gas exports, production outlook

Russia's forecasts for 2025 gas and oil exports have been lowered, while projections on oil exports have increased. The fallout of its conflict with Ukraine as well as its strained relations with the West continue to impact the energy sector.

While Russia's economy is still thriving despite the sanctions, signs of stress are appearing in several industries.

Gazprom, the state-owned gas exporter, suffered losses of nearly $7 billion in 2023. This was its first loss since 1999 due to a breakup with the European Union.

Russian gas is now only 18% of European imports. This is down from 45% by 2021. Oil imports to the EU from Russia are also down from 30% in that period to just 3%. The European Union intends to completely phase out Russian energy in 2027.

According to the latest projections of the Economy Ministry, the Russian Government now expects that pipeline gas exports to countries outside the former Soviet Union will decline by 10.7% this year from 2024 to reach 72 billion cubic meters (bcm), in contrast to expectations for an increase.

As a result of U.S. sanction, Russia is struggling to sell LNG from Arctic LNG 2 which began processing at the end 2023.

Arctic LNG 2 is now shipping gas to China.

The Russian LNG exports are expected to increase by 3% in this year, but still remain lower than previous years.

In addition, the document showed that oil and gas exports were expected to increase in value this year from previous estimates of $200.3 billion to $206.1 billion. However, they were revised downward for 2026 from $220 billion to $215.2 from $215.2 billion.

The forecast for oil exports this year is now 240.1 million tonnes, up from the 229.7 millions tons of the previous forecast.

The projections were made before the Ukrainian drone attacks, which targeted Russia's energy infrastructure and the port of Primorsk, the largest oil port in the Baltic Sea. This put a strain on Russia’s oil production. (Reporting and writing by Darya Kosunskaya, Editing by Joe Bavier & Louise Heavens; Writing by Vladimir Soldatkin)

(source: Reuters)