How Gazprom helps the Kremlin put the squeeze on Europe

THE BUSINESS pages of newspapers tend to deal with the cut and thrust of competition, rather than the cacophony of war. But when it comes to Vladimir Putin’s assault on the sovereignty of Ukraine, there is a company—the world’s largest gas producer—that is right in the thick of it. Gazprom, majority-owned by the Russian state, has mastered the art of furthering the Kremlin’s interests as well as its own commercial ones. That extends to squeezing European gas supplies until the pips squeak. On February 22nd it received a dose of its own medicine when Germany said it would mothball the Nord Stream 2 (NS2) pipeline owned by Gazprom in retaliation for Russia’s warmongering in Ukraine. Two days later Russia attacked Ukraine. Even those two events may not stop the firm from making mischief—and money.

To understand Gazprom, it helps to remember it is a child of the cold war, born from the Soviet Union’s Ministry of the Gas Industry in 1989. Its boss, Alexey Miller, has run it since 2001, the year after Mr Putin took power. The two men are cut from the same cloth. When America imposed sanctions on Mr Miller in 2018, he remarked: “Finally I’ve been included. It means we are doing everything right.” Investors in the West, who buy Gazprom stock for a spectacular dividend yield, lament that it splurges on projects that benefit the state, not shareholders; a plan to build the world’s second-tallest skyscraper in St Petersburg is a case in point. As for mixing politics with commerce, its business model relies on a monopoly on the high-margin export of piped natural gas in order to cross-subsidise cheap gas to Russians. In a land of frozen winters, that is a precious quid pro quo for Mr Putin.