GMT Russia’s Gas Giant on the Back Foot
A few years ago Gazprom look set to sweeping across Europe and conquering all in its path; it was inevitable that the company would take over rival utilities all across Europe and achieve full-spectrum dominance.
However, today the company is back peddling, forced to defend market share amid a natural gas glut created by the economic downturn and technological breakthroughs elsewhere.
Gazprom acknowledged on February 24, for the first time, that it has opened long-term contracts with major customers like German, and rewritten the link between oil and gas prices, that were previously inviolate.
The International Herald Tribune comments that the decision by E.ON Ruhrgas of Germany and Eni of Italy signals a major shift by some of Europe's biggest energy companies.
Gazprom considers its move to be a temporary response to short-term market conditions, but given the forces of change sweeping through the world's natural gas markets, even this small change could leave it vulnerable.
In a related article, The Wall Street Journal adds that given the current environment, Gazprom may struggle to put the free-market genie back in its bottle and reassert its dominance in future.