Gazprom warns of rising EU gas volatility amid fears of deindustrialisation

Gazprom CEO Alexei Miller issued a stark warning about the future of the European gas market. Speaking at the International Gas Forum in St. Petersburg, Miller highlighted the increasing volatility of gas prices and the possibility of further price shocks and supply disruptions. He attributed these risks to the ongoing “deindustrialization” of Europe, a result of high energy prices, which make European industries less competitive compared to global counterparts.

According to Miller, EU and UK gas demand fell by 11 billion cubic meters in the first nine months of 2024. Key sectors such as steel, cement and chemicals were hit hard, with some industries seeing production fall by 10% over the last year and a half. The situation forced many industrial enterprises to close or relocate production, especially in Germany.

Miller also noted that energy costs in Europe are 2-3 times higher than in the US, while gas prices are 4-5 times higher. This cost disparity makes it difficult for European companies to remain competitive on the global stage.

Looking ahead, Gazprom expects global gas demand to reach 5.7 trillion cubic meters by 2050, driven by population growth and digitalisation. Most of this growth will come from countries such as China, India and Russia, and demand in the Global South will increase.

For the US, Miller pointed to a slowdown in gas production due to the depletion of shale deposits and increased domestic demand. Interestingly, the US is increasing gas imports from Canada, indicating that even the world’s largest gas producer is facing supply challenges.

Miller pointed out that Russia sees new opportunities in partnerships with global organizations such as BRICS, which could shape the future of the gas market.

Russian Finance Minister Anton Siluanov recently said that Russia is moving towards reducing its share of volatile income and reducing Russia’s dependence on oil and gas.

By Julianne Geiger for Oilprice.com

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