You’ve heard of Gazprom, one way or another. There is likely no company that has shaped relations between Russia and the West over the past two decades as profoundly as Gazprom. It has become synonymous with hot-and-cold relations, for many a tool in the Kremlin’s hands, used at will—as a stick or a carrot, depending on the context and broader interests. Whether as a handy instrument of “gas” blackmail of neighbors (Ukraine in 2006/2009) and the EU, or as one of the key connecting elements in Russia-Europe economic relations (Nord Stream 1 and 2), and a component of so-called soft power (let’s not forget: until February 2022, the Russian gas giant was also one of UEFA’s main partners).
For the Russian political leadership, Gazprom remained a source of national pride and a jewel. Former president Dmitry Medvedev even declared in 2007 that the company would become one of the most valuable in the world, with a market capitalization exceeding one trillion US dollars. Today, Gazprom is a pale shadow of those forecasts—just another major loser in the hot war in Ukraine and the ensuing Cold War 2.0 between Russia and the West. Its market capitalization hovers around $40 billion—just 4% of Medvedev’s grand prediction and only a tenth of its historical peak in May 2008.
Given Europe’s move away from Russian gas and the war in Ukraine, there’s constant “noise” around Gazprom—misunderstandings (often deliberate), disinformation, and propaganda—so it’s worth examining the situation more closely and placing it in a broader context.
This fall in the company’s value isn’t just about market capitalization, which reflects Western sanctions and the withdrawal of investors from the Russian capital market. The reasons for alarm run deeper and are harder to resolve. In 2023, Gazprom recorded a loss of about $7 billion, which deepened last year—to over a trillion (1,000 billion) rubles. What does that mean in real terms? Around $13 billion. To translate that into a Slovenian context: this is comparable to Slovenia’s entire annual state budget in recent years. Meanwhile, the company’s debt has risen significantly, and some independent economists warn that the Russian government will eventually have to bail Gazprom out with taxpayer money, or it will face bankruptcy.
Given that the company employs around half a million people and was once a key source of federal budget revenues (about 13% before the war!), this is no longer negligible. Not just for market or political analysts, but also for geopolitical planners and international decision-makers who keep asking: “How long can the Kremlin continue to fund the war?” Since the war in Ukraine, Gazprom has overnight transformed from a national pride into a national patient. What happened?
In the past three years, Gazprom has lost the majority of its European market—the most profitable part of its export portfolio for decades due to high prices. The prices it fetched in Europe were completely incomparable to what it charges domestic Russian consumers. And while we don’t have exact data, Gazprom is unlikely ever to reach such prices in China, which is often (wrongly) touted as a replacement for the European market. The loss is massive: from about 150 billion m³ of exported gas in 2021 to only 31 billion m³ last year—just one-fifth—mostly to non-EU European countries (like Turkey, Serbia). Austria still imported Russian gas until autumn 2024, and some transit continued via Ukraine, but the drop in 2025 will be even steeper. Gazprom has lost the EU market—leaving a massive hole in its balance sheet.
This also shatters the narrative that the EU was unilaterally dependent on Russian gas and that Gazprom and the Kremlin could indefinitely blackmail European decision-makers and the public with threats of cold winters—along with social unrest, political instability, and recession. None of that happened. But that doesn’t mean the EU and its citizens haven’t felt the effects of moving away from Russian gas. We have—mostly not through cold homes, but through reduced purchasing power (inflation) and lower economic activity. The situation is far more complex: decades of Russian gas supply created mutual dependency.
By definition, cutting off such cooperation or acting irrationally in such a power dynamic harms both sides—leading to a lose-lose situation, not a win-lose. But that’s the picture the Kremlin still wants to paint. It clings to the propaganda narrative that Europe is on the verge of economic collapse and a “new ice age,” while Russia’s (gas) peace will endure without European consumers and shift eastward. But apart from (pro-)Russian propaganda trolls and so-called useful idiots, few believe that anymore. The numbers make it clear.
The whole issue extends beyond economics between Russia and the EU. There’s the war in Ukraine and the persistent, divisive question in European public discourse, strongly influencing Brussels’ policy-making: To what extent is the EU still helping finance Putin’s war through gas purchases? Isn’t this—alongside economic sanctions that also harm the EU—a double shot in the foot? Recently, the claim has been (intentionally?) spread that EU imports of Russian gas increased in 2024 compared to the previous year. Hence, conclusions like: “They’re lying to you. Fools rule Europe, imposing sanctions while buying more gas. Pure hypocrisy that proves sanctions are pointless.” And so on.
But don’t be misled—it’s just another of many planned disinformation campaigns. In addition to Gazprom’s pipeline gas, the EU also imports Russian liquefied natural gas (LNG). The volumes are much smaller than past pipeline deliveries, but still not negligible—about 24 billion m³ in 2024. This gas mostly comes from the Arctic Yamal LNG project, which isn’t owned by Gazprom or the Russian state, but by a mixed international-Russian consortium involving France’s Total (20% stake), Chinese investors (30%), and the Russian private energy company Novatek—controlled by Putin allies. These LNG deliveries increased slightly in 2024, but remain far below levels that could replace lost Gazprom exports to the EU.
How much does this help the Kremlin fund the war? Very little. Unlike Gazprom’s exports, this LNG isn’t taxed in Russia, as the Yamal project enjoys numerous tax exemptions. These make the gas competitive internationally but do not boost the Russian federal budget—in fact, the state must heavily invest in regional infrastructure as a precondition for international financing. So is the European dilemma over whether to buy this gas even valid? Before jumping into moralizing, it’s worth exploring and better understanding the vast grey area that, once again, shows the picture isn’t black and white.
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In 2006, Gazprom introduced a new corporate slogan: Dreams Come True. A few years later, Russian stand-up comedian Semyon Slepakov created one of his cult songs about dreaming of becoming a Gazprom shareholder. He mocked everything Gazprom already represented: extravagance, corruption, cronyism, and the unimaginable wealth of executives. Wealth is derived from resource rents. He sang: “Though the gas belongs to all of us, only your dreams come true.” Paradoxically, the song aired on the entertainment channel TNT, then owned by Gazprom’s media empire. Different times, different Russia. Not only was Gazprom raking in vast profits from the EU, but even laughing at itself was (still) allowed.