Why Gazprom is losing to Labubu
Vyacheslav Butko, economist, economic advisor at the Kyiv Security Forum
This week it became known that the capitalization (i.e., market value) of Russia's Gazprom has become less than that of Popmart, the manufacturer of Labubu toys. This is evidence not so much of the popularity of monster toys, but of the staggering loss of Gazprom's markets and market value as a result of the fencing off of the civilized world from Russia and Russian energy carriers that began after Russia's full-scale invasion of Ukraine.
On the instructions of Russian President Vladimir Putin, Gazprom reduced gas pumping to Europe to 20% of the design capacity of its pipelines on July 27, 2022. At the time, the Russian leadership saw the restriction of gas supplies as a successful strategic move - the last opportunity to use gas as a tool to pressure Europe into withdrawing its support for Ukraine, as this leverage would have lost its effectiveness as Europe refused to buy Russian energy, which would take time.
But the EU has risen to the challenge. First, the European Union (as an institution plus its member states) has provided Ukraine with 160 billion euros in humanitarian, financial and military assistance since the beginning of Russia's full-scale invasion. Secondly, the EU is moving toward a complete rejection of Russian energy. Because gas has turned from an instrument of economic blackmail into a full-fledged weapon of Russia. The European Commission has approached a crucial phase in the implementation of plans to completely stop importing gas and other energy resources from Russia to the EU. The roadmap presented in May contains measures to put an end to energy cooperation between the EU and Russia. Third, the EU has taken energy efficiency and energy conservation seriously, reducing gas consumption by 19.5% (332 billion cubic meters in 2024 versus 412 billion cubic meters in 2021, the last pre-war year).
In 2021, Gazprom supplied 163 billion cubic meters of gas to Europe. In 2024 - 32 billion cubic meters. A 5.1-fold drop. In 2021, the share of Russian gas was 39% of the European market. In 2024, Gazprom's share was 10%.
In three years (2022-2024), Gazprom's European business will be left with only one route of supply to the European market - the Turkish Stream and its branches from the border of Turkey and Hungary north to Hungary and Slovakia, which amounts to 16-17 billion cubic meters. Both lines of Nord Stream 1 are damaged, and Nord Stream 2 cannot be launched without the approval of Germany, which clearly takes a pro-Ukrainian position. And the 18th package of EU sanctions actually puts an end to the operation of both “streams”. The Yamal-Europe gas pipeline is closed for transit through Poland. Transit through Ukraine has been suspended since January 2025. The volume of transit in 2024 was 15.5 billion cubic meters. Now this volume has also “dropped out” for Gazprom. "Gazprom was forced to withdraw from its European subsidiaries - Gazprom Germania, Gazprom Marketing & Trading, etc. To call a spade a spade, it was expelled from these companies. In 2022, Gazprom terminated several long-term contracts, some of which were terminated due to the counterparties' refusal to switch to ruble payments (as demanded by Putin) or due to the closure of transportation routes.
So, there are the following results for Gazprom from Putin's foreign policy and military adventures:
- loss of a high-margin, large-volume, highly solvent European market;
- the collapse of the Turkish gas hub project - Turkey took advantage of Gazprom's difficult situation and demanded a 25% discount on the gas price and a one-year deferral of payment, while Gazprom had to lay the pipeline through the Black Sea at its own expense, but there are great military risks;
- Gazprom's capitalization as of July 2025 is 38 billion US dollars.
While the capitalization of Popmart, a manufacturer of plush toys in the form of monsters under the Labubu brand, is now 41 billion US dollars.
In 2008, Gazprom CEO Alexei Miller claimed that Gazprom's capitalization would be 1 trillion dollars in 7-8 years (i.e. in 2015-2016). And now the capitalization of 38 billion dollars is 26.3 times less. And 7% less than the capitalization of Labubu. It is not a given that Gazprom's capitalization will not continue to decline.
