0 $
2,500 $
5,000 $
895 $

Impending Crisis: Russia’s Gazprom Loses Profit For First Time In History

Support SouthFront

Impending Crisis: Russia's Gazprom Loses Profit For First Time In History

Click to see full-size image

For the first time in history, Gazprom’s suffered a loss on its profit: in the first quarter, the company’s efficiency fell by 306.2 billion rubles ($4.1 billion).

In 2019, the company’s net profit in this period reached over 199.4 billion ($2.7 billion).

The company’s problem is also the devaluation of the ruble, which led to an increase in the company’s external debt by almost 20%: out of 3.7 trillion rubles ($50 billion), almost 85% were occupied in foreign currency.

Also this year, Gazprom forecasts a 16% reduction in exports and a 1/3rd reduction in gas prices. As a result, the company may lose up to $20 billion in export revenue.

To this, an additional $18.8 billion requested from Naftogaz Ukraine can be added, as well as a lawsuit for $1.5 billion from the Polish PGNiG for gas deliveries at an inflated price for six years.

There is little doubt that Gazprom will have to pay both sums.

In addition, the Polish concern does not plan to extend the contract with Gazprom for the supply of gas through the Yamal-Europe pipeline, through which one fifth of all exported gas to the EU passes.

For Gazprom, this means that supplying Russian gas to its customers may become even more expensive.

Through Nord Stream-2 gas pipeline, which is yet to complete and become operational, the company will be able to supply only half of the planned volume, as EU legislation has changed.

Essentially, Gazprom is selling gas to Europe at a loss, since the set prices, taking into account logistics, are already lower than those it sells at in Russia.

In addition, Gazprom’s exports towards Europe are facing even more increasing risks.

On May 14th, the Greek parliament overwhelmingly ratified the interstate agreement of Greece, Israel and Cyprus on the construction of the East Mediterranean gas pipeline (EastMed pipeline).

Only one party abstained from voting, the KKE. A member of parliament from the party, Nikos Karatanasopoulos, said that the agreement bears the seal of the USA and NATO and turns the Eastern Mediterranean into a base for their activities, benefiting only specific groups of businessmen.

Greek Energy Minister Hatzidakis said the agreement will diversify energy sources and gas routes to Greece and Europe. According to him, this agreement is not directed against anyone, but is an indirect response to the provocative activities of Turkey in the Mediterranean.

The head of the Ministry of Energy also indicated strong support for the project from the United States, announcing the upcoming meeting in the near future at the ministerial level of the 3 + 1 group (Greece, Cyprus, Israel and the USA).

The Minister also said that EastMed and other gas infrastructure projects – TAP (Trans-Adriatic Gas Pipeline, TAP), IGB (Interconnector Greece-Bulgaria Inter-System Pipeline between Bulgaria and Greece), a floating LNG regasification terminal in the city of Alexandroupolis and an LNG terminal in Revitus under Athens – turn Greece into the energy crossroads of Europe.

The EastMed gas pipeline is supposed to provide energy supplies from the Eastern Mediterranean through the island of Crete to mainland Greece, from where it is supposed to supply gas via the Poseidon subsea pipeline to Italy and through the connecting gas pipeline between Greece and Bulgaria to other European countries.

As such, if the US is the one delivering the gas, even at its proven higher prices, it is likely trying to diplomatically force its allies into submission, which could specifically not be aimed at Russia and Gazprom, but just to turn a profit, but still is likely to impact the Russian gas monopolist negatively.


Support SouthFront


Notify of
Newest Most Voted
Inline Feedbacks
View all comments

“Essentially, Gazprom is selling gas to Europe at a loss, since the set prices, taking into account logistics, are already lower than those it sells at in Russia.”

Are you guys paying for our energy bill? If I understood correctly… I just want to say thank you. Just yesterday the Kw droped with around 17% on my side. They anounced meat price will drop with around 20% too.

Jens Holm

There are so many sideeffects. So far all consumers in the world are compensated by low fuel prices. So enjoy it. I am americans will love it too araprt from their thracking oil producers.

Some regression is fine for the climate, but manay also can see windpower suddenly is is the high end, which is very bad for the future.

And Yes, most oilproducers cant just stop. And if we dont spend it or store it, they are in big trouble.

But paying or Our taxbills also is a relative.

The main parts of the price for fossils are tax here and in %, so the Goverments will need taxmoney and might raise the tax forpension, school, hospital a.s.o.

But You also see that if We get cheep fossiles our public building do too and by that dont need so much moey for electricity, heating and cooling. The public part here also has many cars. Even many are outsourced, we do pay for it.

Wayne Nicholson

Russian oil is selling for $31 – $32/bbl whereas US oil is selling between $15 – $24/bbl. with Wyoming Sour taking up the rear position at $9.

No one today is selling oil profitably. The question is who is selling at the biggest loss.

Unlike Russian oil US Shale oil has never been profitable. The only thing keeping the lights on in the US oil patch is the fed buying up commercial junk bonds which lets these companies pretend to be businesses a little bit longer.

So while Gazprom sells oil to Germany at a loss and their investors lose money Americans are paying US oil companies to pump oil out of the ground that will never be profitable and the investors of these companies keep getting their dividend cheques and their executives keep getting bonuses courtesy of the US taxpayer.

Americans are such troopers …. not only are they losing their jobs and health care benefits in record numbers but they are willing to pay the gambling debts of rich folk and allow them to keep making money while they’re losing their houses and dying at home from Covid-19 because they can’t afford a trip to the hospital.

The USA …. socialist paradise for the billionaire class.



amerikans will now also pay $38 bil to israel for the virus attack.. rofl such losers..

Daily Beatings

Economics lesson. If you’re operating at a temporary loss as long as your fixed costs are covered by the revenue generated then the loss to keep the business open in the short run is less than the cost of closing the business down.


Gazprom is 49.9% in the hands of private Ziocorporate globalists, are their losses gonna be socialised among the general population?

The plan to make Russia an “equal partner” of the Western Zioterrorists won’t really work as long as dollar/euro central bankers reign supreme.

AM Hants

Doesn’t Russia hold 51% of Gazprom? To the horror of the West.

AM Hants

BS. Remember 2014 and weren’t things a lot worse then? Swings and roundabouts. Gazprom production costs are in rubles, but, what currency do they trade in, for European sales? Sure they have handled a lot worse.

Gary Sellars

What a load of complete butt-fuckery BULLSHIT. Fakery and lies and blatant untruths. Was this “article” written by NYT or WaPo scribblers?

“Essentially, Gazprom is selling gas to Europe at a loss”. Pfftt… Fucking NONSENSE.

C’mon SF, don’t allow yourself to be used for NATOstani propaganda.


vitten by ukie for ukies by ukies as their vet dreams… dream on.. not a single kobeck will come.. not a single one..


No problemo.

Russia has 999 other important, large sources of money.

Would love your thoughts, please comment.x