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Shares of Russian gas giant fall to 2009 levels

by Admin
December 17, 2024
in News, Politics, World
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Shares of Russian gas giant fall to 2009 levels
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Published: December 17, 2024 11:49 pm
Author: RT

Gazprom’s stock took a hit after Kiev announced it will not extend the gas transit deal with Moscow

The share price of Russian state energy major Gazprom plummeted to its lowest in nearly 16 years on Tuesday after Ukraine announced it will not extend the gas transit contract with Moscow after December 31. Russia still supplies several Central European countries via the Ukrainian gas transmission network.

Gazprom was trading at 106.1 rubles ($1.02) per share on the Moscow Stock Exchange at its lowest point on Tuesday afternoon, before recovering some of the losses later in the day. The afternoon low marks the company’s lowest share price since January 26, 2009, when Gazprom shares traded at 101.64 rubles.

Gazprom shares have been falling for several days in a row, following the general downward trend on the Moscow Stock Exchange.

Analysts who spoke to Russian business daily RBK attributed the decline to a combination of factors, including the company’s falling profits, geopolitical risks, suspended dividend payments to shareholders, and overall market performance. However, more bad news for the company came from Kiev this week.

Ukrainian Prime Minister Denis Shmigal announced on Monday that the deal allowing Russian gas to transit through Ukraine will not be extended beyond the end of the year. Following discussions with Slovak Prime Minister Robert Fico, he said that Ukraine is open to negotiating gas transit for any origin except Russian.

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FILE PHOTO: Ukrainian Prime Minister Denis Shmigal
Ukraine won’t extend Russian gas transit deal – PM

“If the European Commission officially approaches Ukraine about the transit of any gas other than Russian, we naturally will discuss it and are ready to reach an appropriate agreement,” Shmigal wrote on his Telegram channel. “I stressed that Ukraine’s agreement with Russia on gas transit comes to an end on January 1, 2025, and will not be extended.”

While Gazprom has partially compensated for the decline in volumes shipped to the EU through increased exports to Asia, Kiev’s move could negatively impact the company’s profits. Although some EU countries turned away from Russian gas after the bloc imposed sanctions on Moscow, others continue to purchase the commodity from Gazprom due to its competitive pricing. Ukraine’s transit network is connected to the pipeline systems of Moldova, Romania, Poland, Hungary, and Slovakia. The EU still receives around 5% of its gas from Russia via Ukraine, according to the latest data.

Once Russia’s most valuable company, Gazprom suffered record losses last year. In May, it reported a net loss of $6.8 billion for 2023 – its first annual loss since 1999 – in the wake of dwindling gas exports to the EU. The result came in stark contrast to a net profit of $13.2 billion recorded during the previous year. The firm’s total revenue fell to $92 billion in 2023, down from $126 billion in 2022. The company’s stock price is down around 70% since February 2022.

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Tags: Russia Today
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