Russian energy giant Gazprom has reported staggering net losses of 1.076 trillion rubles ($13.1 billion) for 2024, marking a significant financial setback for the state-controlled company.
The losses, reported by The Moscow Times, reflect a dramatic decline, with the company hemorrhaging an average of $251 million per week, $35 million per day, and $1.4 million per hour.
Despite an 11% rise in total revenue and a 14% increase in gas-related revenue, Gazprom ended the fiscal year with a sales loss of 192 billion rubles ($2.3 billion).
The company’s financial woes have been further compounded by plummeting share prices in its subsidiary, Gazprom Neft, and a newly imposed income tax hike to 25%, which has significantly increased its deferred tax liabilities.
This financial downturn follows an already challenging 2023, during which Gazprom posted a net loss of 629 billion rubles ($7.6 billion) under international accounting standards—its first recorded deficit in 25 years.
The company’s efforts to maintain its foothold in the European energy market have been largely unsuccessful, with gas exports to the European Union (EU) dwindling to just 32 billion cubic meters in 2023, a stark contrast to the 180 billion cubic meters it supplied in 2018 and 2019.
As financial pressures mount, Gazprom has been forced to adopt cost-cutting measures, including workforce reductions.
Reports from January 13 indicate that the company is preparing to lay off approximately 1,600 employees from its central office, a move reflecting its deepening economic struggles.
Declining European Demand and Geopolitical Shifts
The most significant factor behind Gazprom’s downturn is the EU’s strategic push to reduce its dependency on Russian energy supplies in response to Moscow’s invasion of Ukraine.
Over the past two years, European nations have accelerated their shift toward alternative energy sources, including liquefied natural gas (LNG) imports from the United States and Qatar, as well as increased investments in renewable energy infrastructure.
Adding to Gazprom’s woes, Ukraine has refused to renew its transit agreement with the company, effectively cutting off a critical pipeline route for Russian gas supplies to the EU.
This development has severely disrupted Gazprom’s ability to transport its gas westward, forcing it to rely more heavily on exports to China and other Asian markets, where infrastructure and long-term agreements remain limited.
A Bleak Outlook for Russia’s Energy Giant
Gazprom’s financial turbulence underscores the broader challenges facing Russia’s energy sector. The company, once a dominant force in European energy supply, is now grappling with reduced market share, geopolitical isolation, and shifting global energy dynamics.
Looking ahead, Gazprom’s ability to recover will largely depend on its success in diversifying its export destinations and securing new long-term contracts.
However, with the EU’s ongoing push for energy independence from Russia and the growing global emphasis on cleaner energy alternatives, the company’s future remains uncertain.
For now, Gazprom’s record-breaking losses serve as a stark reminder of how geopolitical events and market shifts can reshape the fortunes of even the largest energy corporations.
This article was created using automation technology and was thoroughly edited and fact-checked by one of our editorial staff members
