Russia Slashes Export Price For Natural Gas For 2024 And Beyond

Russia has made a downward revision to its forecast for natural gas exports for 2024-2026, data from Russia’s economy ministry showed on Friday.

According to the Economy Ministry, Russia is now forecasting that its natural gas exports to countries outside the ex-Soviet Union will be $434.6 per 1,000 cubic meters this year before falling substantially to $321.7 per 1,000 cubic meters next year. Further downward revisions were made in the forecasts for subsequent years, to $308.3 in 2025, and sub-$300 in 2026.

The adjustments are lower than the $405.4 seen for 2024 in the draft forecast made earlier this month.

And Russia’s conservative figures are even more bleak, at $419.4 for 2023, $290.7 in 2024, $272.3 in 2025, and $260.2 in 2026.

Approximately one-third of Russia’s budget revenues come from the sale of oil and natural gas.

While forecasting a lower price for its natural gas exports, Russia also announced on Friday that it was increasing its budget spending for next year by 36.6 trillion roubles, or $383 billion, with increases in both social and military spending as its military operation in Ukraine rages on.

Russia said earlier this week that it expects domestic oil and gas production to decline this year. For natural gas, its production is expected to fall to 642 billion cubic meters this year, compared to 672 bcm last year. Meanwhile, its natural gas exports to Europe have sagged to near 25% of the levels seen before its invasion of Ukraine. Gas supplies to China via the Sila Sibiri, however, hit a new record in July of 2 bcm. LNG shipments from Russia to Europe, however, were up 40% between January and July this year, compared to 2021 volumes.

By Julianne Geiger for Oilprice.com

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