Russian gas exports dwindle for the second year with Europe and Turkey taking the hit

The Russian gas giant, often touted as the jewel in Russia's economic crown sold to what they categorize as 'far abroad' countries, including Europe - Bar the Baltic states, Turkey, and China, a total of roughly 69 billion cubic meters of natural gas according to estimates from the Argus Gazprom agency.

This marks another consecutive annual slump in this area. This time, the volume fell approximately 33 percent compared to 2022 - reveals the Centre for Eastern Studies - when nearly 101 billion cubic metres of natural gas was exported there.

Gazprom bore the brunt of this loss in the European market, where it only dispatched about 26 billion cubic metres of gas, that is, nearly 59 percent less than the previous year.

There was also a reduction in the second key market for Russia. In 2023, Turkey received 20 billion cubic metres of pipeline gas, whereas, in 2022, it purchased 22 billion cubic metres of natural gas from Russia.

"This is what the total collapse of Gazprom looks like - so far illustrated by estimates," assessed OSW analyst Filip Rudnik.

The Russian colossus is compensating for this by exporting to China, which has grown to become its most crucial market and largest single importer of Russian gas. Through the Siberian Force-1, 23 billion cubic metres of raw material was dispatched there, reflecting an increase of 47 percent as against 2022 levels.

"The attempt to recompense for the 'lost' volumes in Europe via augmenting Russian exports to other markets is still a distant dream. Contrary to Moscow's assertions, China replacing Europe as the most significant gas recipient from the Russian Federation doesn't particularly progress Kremlin's ambitions to shift sales from Europe to China," Rudnik evaluated.

Russia aims to augment its supplies to Europe in 2024, but the outlook is pessimistic, predominantly due to the expiration of the transit contract between Gazprom and Ukrainian Naftohaz at the close of the current year.

As OSE points out, nearly half the volume is supplied to Europe through this pathway. The remainder depends on TurkStream, where the pipeline's capacity becomes a limitation.

"The present gas transportation routes to Turkey - one TurkStream line and BlueStream - permit a maximum conveyance of about 31 billion cubic metres of gas annually. To compare, the collective nominal capacity of four Nord Stream lines was 110 billion cubic metres per year," the expert highlighted.