Russia Cuts Its Gas Export Outlook to 72 Bcm and Leans Harder on Oil as Europe Keeps Walking Away

Russia Cuts Its Gas Export Outlook to 72 Bcm and Leans Harder on Oil as Europe Keeps Walking Away Moscow now expects pipeline gas exports outside the former Soviet Union to fall almost 11% this year, formalizing a pivot toward oil as its European gas market shrinks for good. Russia has lowered its forecast for gas exports and production while raising its projections for oil exports, as the fallout from its conflict with Ukraine and strained ties with the West continue to weigh on the energy sector.² The revision matters because it is Moscow itself, not Western analysts, conceding that the European gas business that once anchored its budget is not coming back — and that oil is now carrying the load. The gas numbers tell the story of a market lost. The Russian government now expects pipeline gas exports outside the former Soviet Union to decline 10.7% this year from 2024, to 72 billion cubic metres, reversing earlier expectations of a recovery.² Russian gas now accounts for just 18% of European imports, down from 45% in 2021, while the bloc's oil imports from Russia have fallen to 3% from around 30% over the same period.² Before the war, Russia supplied nearly 40% of the European Union's pipeline natural gas, a position that has effectively been dismantled.³ The financial damage is concrete. State-owned Gazprom incurred losses of almost $7 billion in 2023, its first annual loss since 1999, driven by the rupture of ties with the European Union that had been its main source of gas-export revenue.² A company built to sell gas to Europe lost money when Europe stopped buying, and the export forecast confirms the structural nature of that loss rather than treating it as a temporary dip.² The pivot to oil is where Moscow is trying to recover the revenue. Oil exports for this year are now seen at 240.1 million tons, up from a previous forecast of 229.7 million tons, and the value of oil and gas exports for this year was raised to $206.1 billion from $200.3 billion.² LNG exports are seen edging up just 3% to 35.7 million metric tons, still below earlier projections — confirmation that the seaborne gas business is not filling the pipeline gap.² The money increasingly comes from barrels, not molecules. The forward picture is softer, which is the catch in the pivot. While export earnings were raised for this year, they were revised down for 2026 to $215.2 billion from $220.4 billion.² Leaning on oil exports works in the near term, but the downgraded 2026 figure signals that Moscow does not expect the oil ramp to fully or durably compensate for the gas it has lost.² On the other side of the war, Ukraine's plans reflect the same diminished gas map. Ukraine aims to store 14.6 billion cubic metres of gas, about 34% of capacity, in its underground storage by the start of winter, with a minimum target of 13.2 bcm, or 30%.¹ That is a deliberately modest target for a country whose vast storage once served as a buffer for Russian gas transiting to Europe — a marker of how much smaller that role has become.¹ The two sides of the front are converging on the same outcome from opposite directions. Russia is formalizing the permanent shrinkage of its European gas franchise and shifting its budget onto oil, while Ukraine sets storage ambitions sized for a transit role that no longer exists at its former scale.^2,1 The European gas map drawn before 2022 is not being restored; it is being replaced. The signal to watch is whether Russia's oil exports actually hit the raised 240.1-million-ton target and hold their value into a softer 2026, and whether Ukraine reaches even its 30% storage floor before winter.^2,1 If oil revenue holds, Moscow absorbs the gas loss; if the 2026 downgrade proves optimistic, the budget strain from losing Europe's gas market deepens.²