Lower gas prices in Europe threaten Russia's revenues from fuel sales, which could be cut in half. According to analysts, low gas prices have significantly affected the revenue expectations of Gazprom, Russia's main energy company controlled by the Kremlin, from its sales to Europe. A report on this was published by Reuters.

According to Reuters, the decline in export revenues could significantly worsen Russia's budget deficit, which has already reached 117% of the annual plan, especially due to the significant costs of supporting Russia's military actions in Ukraine and the sanctions imposed by the West on Russian oil and gas exports.

Gazprom's gas sales to Europe, once its main source of foreign currency earnings, have plummeted due to the deterioration of relations between Russia and the West. According to Reuters, Russian gas exports to Europe via pipelines fell to about 12.1 billion cubic meters during the first half of 2023, down from 62 billion cubic meters in 2022. This indicates a potentially serious decline in exports this year.

According to analyst Ronald Smith, prices for Russian gas in Europe this year will average $445 per 1,000 cubic meters, which is $385 less than in 2022.

If Russia maintains a stable volume of gas exports to Turkey, which could reach 22 billion cubic meters in 2023, then sales to Europe will amount to 28 billion cubic meters. According to Reuters, this could lead to a decrease in European revenues to $12.5 billion this year, compared to about $52 billion in 2022.

It is worth recalling that gas prices in Europe have already fallen by two-thirds this year. Last year, prices were four times higher than they are now, forcing countries to revert to coal-fired power to secure electricity supplies after Russia cut gas supplies.

According to trade information, natural gas prices in Europe could temporarily fall below zero this summer if rising inventories do not keep pace with growing demand for the fuel.