Russia's Gas Giant Faces Big Squeeze

Powerful Gazprom has too little oil to meet demands
By Matt Cantor,  Newser User
Posted Dec 24, 2007 9:00 PM CST
Russian President Vladimir Putin speaks at his meeting with German Foreign Minister Frank-Walter Steinmeier in the Kremlin in Moscow, Tuesday, Dec. 18, 2007. Russia's state natural gas monopoly OAO Gazprom...   (Associated Press)
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(Newser) – Russia faces a threat to its international trump card as Gazprom—its powerful natural gas company—struggles to meet massive worldwide demand, Newsweek reports. The company gets much of its oil dirt cheap from former Soviet republics in Central Asia, then resells it a handsome profit to Europe. Now those Central Asian nations are beginning to cut their own deals—and land important new customers such as China.

''Russia's monopoly is under attack," said one analyst. ''Other neighbors are starting to build pipelines, and local producers are getting smarter, too." Gazprom is a central cog in Russia’s foreign policy and a source of national pride. But the company hasn’t opened a new field since 1991, and one estimate warns that it will be unable to meet even Russia's domestic oil needs in three years.