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Gazprom CEO Alexei Miller has issued a stark warning about the future of the European gas market. Speaking at the St. Petersburg International Gas Forum, Miller highlighted the rising volatility in gas prices and the possibility of new price shocks and supply disruptions. He attributed these risks to Europe’s ongoing “deindustrialization,” a result of high energy prices that make European industries less competitive compared to global counterparts.
According to Miller, gas demand in the EU and the UK dropped by 11 billion cubic meters in the first nine months of 2024. Key sectors like steel, cement, and chemicals have been hit hard, with some industries seeing a 10% production decline over the past year and a half. The situation has forced many industrial enterprises to shut down or relocate production, particularly in Germany.
Miller also noted that energy costs in Europe are 2-3 times higher than in the U.S., while gas prices are 4-5 times higher. This cost disparity is making it difficult for European companies to remain competitive on the global stage.
Looking forward, Gazprom expects global gas demand to reach 5.7 trillion cubic meters by 2050, driven by population growth and digitalization. Most of this growth will come from countries like China, India, and Russia, with demand in the Global South also rising.
For the U.S., Miller pointed out a slowdown in gas production due to depleting shale deposits and rising domestic demand. Interestingly, the U.S. is increasing gas imports from Canada, indicating that even the world’s largest producer of gas is facing supply challenges.
Miller emphasized that Russia sees new opportunities in partnerships with global organizations like BRICS, which could shape the future of the gas market.
Russia’s Finance Minister Anton Siluanov recently said that Russia was moving towards reducing its share of volatile income and reducing Russia’s dependence on oil and gas.
