"It means that last year's production is nearly a third less than its prewar production of 515 bcm in 2021, with Reuters reporting that this is the lowest since it was set up in 1989 toward the end of the Soviet Union.

"Gazprom is in a very difficult position," said Henning Gloystein, director of energy, climate and resources at the Eurasia Group, a political risk consultancy.

"Europe gas sales used to be by far the biggest source of revenue for Gazprom."

"Russia's invasion of Ukraine and the subsequent pipeline supply cuts deprived Gazprom of those sales, and there's no quick and easy way to replace them," he told Newsweek.

.

Tom O'Donnell, a Berlin-based energy analyst, said the problems stem from a miscalculation by Putin who "had been planning for years before the escalation of the war against Ukraine, to make Europe more dependent on Russian gas."

"This was effected through a partnership with Berlin who was very trusting of Putin," he told Newsweek.

"In the months before Putin launched the actual war, he cut off the gas to Europe. He tried to claim force majeure by making excuses like the compressors could not be repaired because of sanctions."

.

After much of the lucrative European market disappeared, the Kremlin had hoped the Power of Siberia 2, 2,700-mile pipeline would pipe 50 bcm a year between the Yamal Peninsula in the Arctic to northwest China, offsetting those losses.

But prices in the Asian nation are much lower than in Europe, and Beijing is reportedly trying to drive a hard bargain, while a deal over its construction has yet to be reached.

The Financial Times reported Beijing only wants a fraction of Siberia 2's planned annual capacity as well as prices close to Russia's subsidized domestic prices. Russia's lack of another overland route for its gas exports means Gazprom would probably have to accept these conditions, the paper said.

Vladimir Milov, former Russian deputy energy minister, told Newsweek that Russia cannot make any profits by exporting pipeline gas to China." excerpts