Russia’s gas production collapses to late-stage USSR levels

Russian gas production so far this year has fallen to levels not seen since the 1970s.

The country’s state energy giant Gazprom said in its latest report that gas production in the first half of 2023 was 179.45 billion cubic meters (bcm). Gazprom added that this represents a decrease of almost a quarter (24.7 percent) compared to the previous year and a 26.5 percent decrease in gas supplies to the domestic and foreign markets.

Since Vladimir Putin’s large-scale invasion of Ukraine began on February 24, 2022, sanctions have been aimed at isolating Russia from the global economy, cutting it off from the SWIFT international banking system and freezing some of its foreign exchange reserves.

The invasion also caused Europe to drastically cut purchases of Russian oil and gas. The continent weathered an energy crisis last winter, including by reducing energy consumption and finding other suppliers, such as sellers of sea-based liquefied natural gas (LNG).

The Gazprom report said the West contributed to the fuel’s decline, adding that “the adoption of politically motivated decisions in a number of countries aimed at abandoning imports of Russian gas.”

The independent Russian-language news agency Agentstvo reported that Gazprom “has never recorded such a low production rate in its entire history” and that “the last time a similar figure was recorded in the Soviet Union was in 1978,” a year in which 372, 1 billion cubic meters were produced.

“Since then, gas production has only grown,” Agentstvo reported. The source added that Soviet gas production also included fields in Ukraine and Uzbekistan. Newsweek has sent Gazprom an email requesting further comment.

In February 2023, Putin accused the West of direct attempts to hinder and contain the Russian gas industry, but added that Gazprom was “moving forward and launching new projects.”

Meanwhile, the Gazprom report confirms Russian state bank VEB’s forecasts, which Reuters reported in September, that Russian pipeline natural gas exports to the European Union could fall to 21 billion cubic meters, almost two-thirds less than last year and a six-fold decline from 2021.

VEB said Russian gas exports to Europe are expected to fall to 15 billion cubic meters in 2026. Russia offers discounted energy exports to so-called “friendly” countries. However, VEB added that it was unable to supply enough gas to Asia to make up the deficit due to infrastructure constraints.

Gazprom chief Alexei Miller will accompany Putin during the Russian president’s visit to China next month to boost trade ties and offset losses in gas sales in the lucrative European market, Reuters reported.

Putin is expected to meet his Chinese counterpart Xi Jinping for talks in Beijing, where he will take part in the third Belt and Road Forum, coming months after Xi’s high-profile visit to Moscow in March.