Russian energy giant Gazprom reported on Thursday its first annual loss in 25 years, attributed to decreasing gas exports amid pressure from Western sanctions over the war in Ukraine.

Gazprom Group recorded in 2023 a net loss for the first time since 1999, valued to be 629 billion rubles ($6.7 billion). This stands in stark contrast to its net profit of $13.2 billion in 2022.

The company saw its total revenue drop to $92 billion in 2023 from $126 billion in the prior year.

Directly after publishing the earnings, the firm's stock plunged over 4% on Thursday.

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The report indicates that revenue from gas sales declined by 40% to $47.4 billion, while revenue generated from oil sales grew by 4% to $38 billion. Additionally, Gazprom's electricity grid sales improved by 6% to $6.6 billion.

Russian natural gas exports to its major European Union markets have significantly declined because of sanctions related to the conflict in Ukraine and the sabotage of the Nord Stream pipelines.

Gazprom's natural gas supplies to Europe fell by 55.6%percent to 28.3 billion cubic meters in 2023, Reuters reported earlier. This drop in exports is the largest since the early 1970s, according to estimates from the International Energy Agency.

Nevertheless, Gazprom has shifted its focus in energy trading to Asia, particularly China, which has become one of its primary purchasers. When the Power of Siberia pipelines operate at full capacity, the volume of Russian gas supplies to China could reach nearly 100 bcm annually. The company anticipates that once this occurs, China will completely replace the EU as a buyer of Russian gas.

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