The CEO of Russian oil giant Gazprom Alexei Miller has issued a stark warning about the future of the European gas market.
Speaking at the St. Petersburg International Gas Forum (October 8-11, 2024), Mr. Miller emphasized the increased volatility of gas prices and the possibility of new price shocks and supply disruptions.
Mr Miller said these risks were due to the ongoing “deindustrialization” in Europe, a consequence of high energy prices that has made European industries less competitive relative to global counterparts.
Gas demand in the European Union (EU) and the UK fell by 11 billion cubic meters in the first nine months of 2024, according to Gazprom CEO.
Major industries such as steel, cement and chemicals have been hit hard, with some industries seeing output fall by 10% in the past year and a half.
This situation has forced many industrial enterprises to close or relocate production, especially in Germany.
Mr. Miller also noted that energy costs in Europe are two to three times higher than in the US, while gas prices are four to five times higher.
This cost difference makes it difficult for European companies to remain competitive internationally.
Looking ahead, Gazprom expects global gas demand to reach 5.7 trillion cubic meters by 2050, driven by population growth and digitalization.
Much of this growth will come from countries such as China, India and Russia, while demand in the Global South will also increase.
For the US, Mr Miller pointed to a slowdown in gas production due to depleting shale deposits and rising domestic demand.
Notably, the US is increasing its gas imports from Canada, showing that even the world's largest gas producer is facing supply challenges.
Mr. Miller stressed that Russia sees new opportunities in partnerships with global organizations such as BRICS, which can shape the future of the gas market.
Russian Finance Minister Anton Siluanov recently said that Russia is moving towards reducing the share of volatile income and reducing Russia's dependence on oil and gas.
