The last decade has been difficult for the Russian energy giant, Gazprom. The world’s largest natural gas producer faced significant headwinds since the 2008 economic crisis and a dip in European demand that coincided with a push push for market liberalization and diversification in the European Union (EU). The rapidly growing competition from liquefied natural gas (LNG) producers in the U.S., Australia, or Qatar (to name a few), operating in an increasingly liquid global market have additionally undermined Gazprom’s position. But whether Gazprom will be able to prosper going forward will not only depend on its ability fend off competition from abroad. Much will depend on whether Gazprom can defend its position domestically, since companies such as Rosneft and Novatek have pushed for some time now to weaken Gazprom’s export monopoly.
Established in 1989 as a state-owned company, Gazprom dominated Russian and global natural gas production. In addition to owning over 90 percent of national reserves, Gazprom was also granted a monopoly on natural gas exports—the bulk of which have been directed to Europe. Gas export revenues have been important for the company and for Russia’s budget, but exports have also been used to exert political pressure, especially in Central and Eastern Europe where dependence on Russian gas has been historically high.