Putin explained the reduction in gas production by the need to maintain price levels

President Vladimir Putin said that Russia’s reduction in gas production is due to the need to support the world market. At the same time, he acknowledged that gas prices have “fallen a little”, but called the situation “absolutely stable”.

“We have set a certain price for gas. She sank a little. We are reducing production, as it were, but nevertheless we have it at the proper level. Prices fluctuate in world markets. But all our actions, including the voluntary reduction in production, are connected with the need to maintain a certain price environment on world markets,” the president said at a meeting with members of the government.

Vladimir Putin noted that Russia is in dialogue and contact with its OPEC+ partners. “On the whole, the situation here is absolutely stable,” he said.

At the end of April, Rosstat published a report on industrial production in Russia for the first quarter: according to it, natural gas production in Russia for the quarter fell by 14.1% in annual terms and amounted to 149 billion cubic meters. m. However, data on oil and gas condensate production were not presented in the Rosstat report.

The government suspended the publication of any official statistics on hydrocarbon production in Russia on April 28, 2023. According to Kommersant’s estimates, in 2022 gas production in Russia decreased by 11.8%, to 672 billion cubic meters. m. This is due to the reduction of “Gazprom” gas supplies to Europe to historic lows.

Earlier gas prices in the European market fell to the level of July 2021. This is due to the high supply of LNG from the US, warm weather and strong winds, which increase the generation of electricity from wind farms. Thus, June futures on the Dutch TTF hub fell to $423 per 1,000 cubic meters. m.

By data “Kommersant”, “Gazprom”, faced with a drop in exports, plans to increase revenues from the sale of gas in the domestic market. In particular, the company proposes to the government to liberalize wholesale gas prices for industrial consumers in some constituent entities, introduce seasonal differentiation in wholesale gas prices, and introduce a commercial balancing system.

Read more – “Gas prices blown away by the wind”.

Anastasia Larina