February 5, 2023

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Report: Russia’s gas production and exports are shrinking due to pressure from sanctions

Report: Russia's gas production and exports are shrinking due to pressure from sanctions

A report stated that Russia’s natural gas production will drop by 12% this year and its exports will drop by about a quarter In The Wall Street Journalindicating that the deliberate pressure on the country as a result of the oil sanctions leads to heavy losses.

Russian Deputy Prime Minister Alexander Novak reportedly said Russian state news The TASS news agency said the decline in gas production compared to last year was largely due to the shutdown of export infrastructure.

Most of Russia’s natural gas exports have been via pipelines, primarily to Europe.

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Russian President Vladimir Putin (Mikhail Metzel, Sputnik, Kremlin Pool Photo via AP/AP Newsroom)

Russia’s energy exports have faced mounting pressure from international sanctions and efforts by Europe to restrict Russia’s purchases of oil and gas, all in an effort to drain the Kremlin’s war chest in its attacks on Ukraine.

Novak said separately on Friday that Russia could cut its oil production in response to Western price caps imposed earlier this month, reducing its oil output by 500,000 to 700,000 barrels per day – which he said was a 5% drop. To 7% in capacity – by early next year.

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The European Union and the United Kingdom have also banned seaborne shipments of Russian crude.

Russian officials have downplayed the impact of price caps and other sanctions on Russia’s oil and gas sector, the lifeblood of the country’s economy.

Since Putin invaded Ukraine in February, Russian authorities have stopped publishing data on trade statistics, including oil and gas production, in a bid to shield the economy and domestic businesses from further sanctions.

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Without these numbers, independent verification of Moscow’s statements that it was capable of to prove its economy complex, according to the WSJ.