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Russia's Economic Lifeline is in Trouble

Discussion in 'Issues Around the World' started by ethics, May 2, 2013.

  1. ethics

    ethics Pomp-Dumpster Staff Member

    As two graphs describe the scenario:


    In Europe, where Gazprom once had a reputation for hardball tactics and dictating prices, customers are tapping new sources. Booming shale-gas production in the U.S. has freed up vast quantities of other fuel from around the world, including American coal no longer needed at home. With that new leverage, Gazprom's European customers have squeezed billions of dollars in discounts from the company, and they are pressing for more.

    Europe is Gazprom's most lucrative market. The company supplies about one-quarter of the European Union's natural gas via a network of pipelines. Gazprom said Tuesday its net profit declined by $6.5 billion, or 15%, in 2012, as sales to the EU fell by about 9%.

    Russia has always been a one-trick-pony and the problem is that other countries have been getting their own ponies. My advice now is as what it was back 10 years ago, Russia needs to diversify in order to compete, else they become the next, and flailing, Saudi Arabia.

    In Reversal, Neighbors Squeeze Russia's Gazprom Over Natural-Gas Prices - WSJ.com
  2. Biker

    Biker Administrator Staff Member

    It would be interesting to know how much above the average world wide price Gazprom was originally charging. While there was a 15% drop in profit from the previous year, how much in the black are they still?
  3. David M

    David M Full Member

  4. Allene

    Allene Registered User

  5. ethics

    ethics Pomp-Dumpster Staff Member

    Wanted to give you folks a comparison of how big Gazprom is.


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