Russia is scrambling to find new markets for its vast natural gas reserves, in the wake of a drastic fall in its exports to Europe over the past two years. In the short term, that means using more gas domestically and expanding supplies to countries in Central Asia, where Russian energy is still welcome. Over the longer term, Moscow is counting on a large-scale expansion in its LNG capacity, and the construction of new pipelines to China and Turkey. But amid Western sanctions and Beijing’s seeming hesitance to commit to more Russian supply, these ambitions will be difficult to realise.

Russia’s oil exporters have largely mitigated the impact of Western sanctions by diverting oil to so-called ‘friendly’ countries – primarily China and India. Crude exports totalled 234.3mn tonnes (4.7mn b/d) in 2023, up from a pre-war level of 230mn tonnes in 2021. In contrast, gas exports have collapsed. Exports by pipelines dropped to only 99.6bn m3 in 2023, less than half of the 207.8bn m3 that was delivered in 2021. This decline came on the back of a steep fall in pipeline deliveries to the European Union (EU) – the country’s main market – which came to 26.1bn m3 in 2023 versus 155bn m3 two years earlier.

While EU authorities have praised their own efforts to curb Russian gas reliance, the drop in volumes were chiefly due to the Kremlin’s own weaponisation of gas supplies. Nevertheless, Brussels remains committed to phasing out remaining Russian gas imports, as evidenced by the European Commission’s (EC) position that extending Russia’s contract with Ukraine on gas transit beyond this year is unnecessary, as affected buyers will be able to find alternatives. With no end yet in sight to the war in Ukraine, and given Europe’s embrace of alternative LNG imports, Russia is very unlikely to ever reclaim the 30%+ share of the Continent’s gas market that it once held.