Gazprom Shares Fall to a 17-Year Low: Details
22 June 06:17
Gazprom shares on the Moscow Exchange fell to their lowest level since January 2009—105 rubles per share—according to exchange data, as reported by "Komersant Ukrainian" with reference to Russian propaganda media.
Over the course of the day, Russia’s largest gas holding company fell by 1.43%; since the beginning of the month, it has fallen by 9%; and since the beginning of the year, by 16%; and compared to its pre-war peaks in October 2021, it has lost nearly 75% of its value, or 7.5 trillion rubles. Currently, according to data from the Moscow Exchange, Gazprom is valued at 2.5 trillion rubles, or $34 billion—29 times less than the $1 trillion market capitalization that company CEO Alexey Miller promised to achieve in 2008.
Gazprom, which operates the world’s largest proven gas reserves, fell victim to a failed attempt to “freeze Europe” and redirect Russian gas flows eastward. Exports to distant foreign markets have fallen from a pre-war level of 200 billion cubic meters per year to approximately 80 billion cubic meters—a level last seen in the Soviet Union in the mid-1980s. Supplies to the European market, once Gazprom’s largest, have fallen to their lowest level in at least half a century—about 18 billion cubic meters.
“Gazprom’s revenue from foreign markets is declining as expected, despite the growth in supplies to China,” note analysts at Vector Capital: Beijing is purchasing five times less than the European Union did in the late 2010s, and at a price 40% lower.
And in Europe, Gazprom risks losing one of its last major customers—Hungary, where Viktor Orbán, who is close to the Kremlin, lost the parliamentary elections.
“There is a high probability that Hungary will stop buying gas from Russia. <…> Currently, Hungary is one of the least profitable markets for Gazprom, to which 8–10 billion cubic meters of gas are supplied annually,” notes Finam analyst Sergey Kaufman.
In the medium term, the EU intends to phase out Russian gas—no later than early 2028, and possibly as early as the fourth quarter of 2027, notes BCS analyst Kirill Bakhtin: “In this context, news of the start of construction on the ‘Power of Siberia 2’ project would be very welcome for Gazprom.”
But so far, the pipeline project—with a capacity of 50 billion cubic meters per year—has stalled, and the gas contract with China has not been signed, despite negotiations that have been ongoing for nearly 10 years and Vladimir Putin’s numerous visits to Beijing. According to Financial Times sources, Xi Jinping is demanding that the gas price be lowered to the domestic Russian level—$50–60 per thousand cubic meters. By comparison, China currently pays $258, compared to $420 for European buyers.
