Despite Sanctions: Russian State Gas Company Posts Record Profits

03 March 2022, Russia, St. Petersburg: A flag with the Gazprom logo. Photo: Igor Russak/dp
Igor Russak/picture alliance via Getty Images

Russia’s state-owned gas company has posted record profits despite Western states targeting the country with sanctions.

Despite efforts to massively damage Russia’s economy in response to the country’s invasion of Ukraine, Moscow’s energy industry appears that it is continuing to boom, with Vladimir Putin’s state-owned gas company Gazprom posting record half-year profits on Tuesday thanks to soaring natural gas prices worldwide.

The company has since announced that it has totally halted gas deliveries to Europe via its major Nord Stream pipeline for what are ostensibly reasons to do with repairs, leaving bigwigs in Europe to sweat over whether the supply will ever be turned back on again.

According to a report by Der Spiegel, Gazprom posted a six-month profit of around 2.5 trillion rubles, roughly equivalent to $41 billion.

This is compared to the company’s previous record annual profit of 2.09 trillion rubles which it posted last year, a much smaller sum especially when the value of the now surging ruble is factored into the equation.

Gazprom is now planning on paying investors an interim dividend of 51.03 rubles per share for the first half of this year, though such a move now has to be approved by shareholders, the most important of which is the Russian government, which has over a 50 per cent stake in the company.

News of surging Gazprom profits will likely be seen as a blow for Western lawmakers, who have been making concerted efforts to grind down the Russian economy in response to Moscow’s invasion of Ukraine.

However, while many in Europe and beyond are putting on a brave face for the crisis, it appears that it is the likes of Italy and Germany who are slowly being ground down, with Gazprom once again halting the supply of gas to Europe through its Nord Stream 1 pipeline in order to — it claims — perform repairs on parts of the system.

This has once again prompted fears from politicians who have allowed their countries to become reliant on Russian energy exports, with it being seen as possible that the Kremlin may decide to once again reduce the supply of gas when reactivating the pipeline, should they decide to reactivate it at all. Germany’s Federal energy network says the claim of a shutdown of the pipeline for repairs is ‘incomprehensible‘ and says this is actually a punishment of Germany for opposing Russia’s war against Ukraine.

Despite everything, German Chancellor Olaf Scholz claims that his country — despite massive ongoing difficulties to do with securing energy supplies for the coming months — is now prepared for the winter.

“…we have done what is necessary and can do even more to get through this winter and next winter,” the Chancellor declared, saying that the country had managed to store more gas than many expected it would be able to.

However, such confidence appears to be questionable at best as others in the country warn that there could be gas riots in the country over the coming winter as many are left unable to properly heat their own homes.

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