Loosing the gas game: after a record $150 billion amassed in 2022, Russia’s gas export revenues are set to more than halve this year, amidst lower export volumes and a sharp decline in gas prices.
Russia’s total gas exports are expected to drop by 20% yoy to around 140 bcm in 2022, primarily on lower piped supplies to Europe (-35 bcm) and reduced LNG deliveries (-4 bcm). the increase in piped exports to China (+7 bcm) won’t offset these losses.
Most importantly, Russia’s average export price is expected to halve compared to 2022, amidst the sharp drop in spot prices both in Europe and Asia, as well as more moderate oil-indexed prices (this matters for Sakhalin-II LNG and Power of Siberia gas sent to China).
Altogether, Russia’s gas export revenues are expected to decline well-below their 2022 and even 2021 levels, putting further pressure on the Russian state budget, which is rapidly increasing its deficit.
Meanwhile, Russian gas has also rapidly lost its dominance on the European market, with its share declining from 40% in 2021 to 10-15% in 2023.
What is your view? what will be the impact of these lost revenue streams on Russia and the country’s economy?
Source: Greg Molnar
