LAST UPDATE: 14.53
Russia expects the average price of exported natural gas to more than double this year to $730 per 1,000 cubic meters before falling gradually by the end of 2025 as pipeline gas exports decline, according to Economy Ministry forecasts seen by Reuters. .
Natural gas flows from Russia, Europe’s top supplier, have been flowing at reduced levels this year after a pipeline was shut down when Moscow sent troops into Ukraine in February, some European countries were cut off because they refused to pay for gas in rubles and an outbreak dispute over repairs to a turbine on the Nord Stream 1 pipeline from Russia to Germany. As a result, natural gas prices skyrocketed.
Russia’s economy ministry expects Gazprom’s pipeline gas exports to fall to 170.4 billion cubic meters (bcm) this year, compared with its May forecast of 185 bcm.
The ministry expects natural gas volumes to continue to decline beyond this year, but gave no explanation.
As a result of already tight supplies, Gazprom’s average gas price is forecast to be $730 per 1,000 cubic meters in 2022, more than double from $304.6 per 1,000 cubic meters last year, representing a 40% year-on-year increase forecast of $523.3 per 1,000 cubic meters.
Increase in oil production
Russia has begun to gradually increase oil production after curbs due to sanctions as Asian buyers have increased their purchases, prompting Moscow to raise its forecast for production and exports until the end of 2025, according to the document .
Gazprom has also said gas supplies to China are increasing, but has not given details, while Europe remains by far the biggest market for Russian gas.
The higher volume of oil exports, combined with rising natural gas prices, will help Russia earn $337.5 billion and $255.8 billion in energy exports this year and next year, respectively. The country’s economy ministry did not respond to a request for comment.
Last year, Russia earned $244.2 billion from energy exports, the ministry said.
Overall, economy ministry forecasts seen by Reuters earlier this week show the Russian economy is coping with sanctions better than Moscow initially feared and will shrink less than expected.