Russia's invasion of Ukraine and deterioration of relations with West have limited Gazprom's activities - British intelligence

According to Ukrinform, this was reported by the UK Ministry of Defence, citing intelligence data on the X social network.

The report says that the Russian gas monopoly Gazprom has suffered the largest annual loss in the last 25 years. Last year, Gazprom's profits fell by about 30%, resulting in an annual net loss of about 629 billion rubles (USD 6.9 million).

"The Russian invasion of Ukraine in 2022, and subsequent degradation of Russia's relationships with the West, has severely constrained Gazprom's operations. Gazprom's failure to fully re-orientate its exports away from its dependence on European markets will likely continue to restrict its profits until at least 2030," intelligence experts say.

The British defence ministry noted that although Gazprom has been able to shift some of its trade to alternative markets, they are likely to account for only 5% to 10% of lost European sales in 2023.

"It is highly likely that an increase in future sales is reliant on construction of new export infrastructure, such as the 'Power of Siberia 2' gas pipeline," the analysts stressed.

The UK Ministry of Defence noted that the high taxation of Gazprom's profits in 2022 and 2023 has almost certainly reduced the company's ability and incentives to invest in expansion into alternative markets. Last year, Gazprom paid approximately 2.5 trillion rubles (USD 28 million) to the Russian budget, which is about 9% of total state revenues.

"The Russian government plans to further increase the tax burden on Gazprom in 2024, which likely contributed to Gazprom's decision to cut its investment for 2024 by around 15 per cent," the intelligence concluded.

As reported, on 3 May, the Russian gas monopoly Gazprom reported its first losses in 25 years under international financial reporting standards.