Gazprom shares were worth 106.1 rubles ($1.02) on December 17, their lowest since January 2009. By December 18, the shares had fallen further, to 105.75 rubles ($1.01).
Before the Russia-Ukraine conflict broke out in February 2022, Gazprom's share price fluctuated around 300 rubles ($2.87).
Analysts told Russia's RBC that the decline was due to general market factors as well as obstacles in Gazprom's gas exports to Europe.
In May this year, Gazprom announced its first annual loss since 1999, and the Russian energy company's stock price immediately fell 4.4%. Gazprom's shares continued to fall throughout June, reaching a low of around 113 rubles ($1.08).
The dismal May report reflects Gazprom's "significant loss of market share in the European gas market," Katja Yafimava, a researcher at the Oxford Institute for Energy Studies, told Business Insider.
Europe will get about 40% of its gas from Russia by 2022. In June, a Gazprom report published by the Financial Times suggested that it would take the company a decade to make up for the losses caused by the Russia-Ukraine conflict.
Concerns are growing that the Russian gas transit deal through Ukraine is set to end on January 1, 2025. In September, European Commissioner Kadri Simson said the EU was “committed” to phasing out Russian gas through Ukraine. “We started preparing two years ago,” she said.
Earlier this week, after meeting with Slovakia’s Prime Minister, Ukrainian Prime Minister Denys Shmyhal reaffirmed that Kiev is not interested in extending the Russian gas transit agreement. However, he noted that Ukraine is ready to transport gas from other sources.
In fact, the issue of Russian gas transit is still being considered, says researcher Katja Yafimava. However, the decision by Austrian energy company OMV to cut ties with Gazprom due to a bitter contract dispute reduces the possibility of continuing gas transit through Ukraine.
OMV's decision in early December was considered a historic blow to Gazprom because OMV was among the first companies in Western Europe to import and invest in Russian gas during the Soviet era.
The conclusion of the OMV deal is a major sign of Europe's success in weaning itself off Russian energy, industry experts told Business Insider.
Still, Gazprom’s problems in Europe are not a death knell for the company, Katja Yafimava insists. Gazprom can survive thanks to Russia’s vast domestic gas market. In addition, the shock has been cushioned by strong gas prices.
In the current context, Gazprom needs to look for new markets, with an immediate option being the Power of Siberia 2 pipeline deal - a Russia-China gas pipeline that will sharply increase Russian gas exports to China.
