Russia's troubled Gazprom at a crossroads
What's next for Gazprom? On Wednesday, the Russian energy giant announced its net profit for 2014 had tumbled by 86 percent compared to a year earlier.
But the news for Gazprom, which accounts for around 8 percent of Russia's overall GDP, wasn't all bad. The company supplies about one-third of the European Union's natural gas supplies, and its net sales of gas to Europe grew by 4 percent in 2014.
In a press statement, the state-run firm blamed the financial setback primarily on the ruble's huge drop against the U.S. dollar and the euro. But that currency devaluation is in part the result of two other factors that Gazprom has direct dealings with: the ongoing Ukraine crisis and the historic fall of crude oil prices on the global market.
"Gazprom is facing a perfect storm of faltering European gas demand, economic sanctions on Russia, the falling ruble and global oversupply in liquefied natural gas," energy sector analyst David Hunter told the BBC.
"This is a subtext to a larger geopolitical story," he added, "with Europe keen to create an 'energy union' and reduce its dependence on Russian gas, particularly on its eastern borders."
Last week, the European Commission, the EU's executive body, accused Gazprom of violating EU antitrust rules regarding some of its business practices in Central European and European gas markets, in what it called "an abuse of its dominant market position."
And these economic pressures, along with political and financial pushback from the West, are revealing cracks in Gazprom's once-unassailable market position.
"After years of hard-nosed tactics in Central and Eastern Europe and several high-profile gas supply interruptions, Gazprom's reputation as a reliable supplier is in tatters," Sijbren de Jong, an analyst at The Hague Centre for Strategic Studies, wrote earlier this month in EUobserver, an independent online newspaper.
Gazprom, however, is keeping its options open. Last year it signed an agreement with the China National Petroleum Corporation (CNPC) to supply the People's Republic with 38 billion cubic meters of natural gas annually starting in 2018.