Russia's gas sales to China haven't compensated for the lost trade with Europe caused by sanctions, according to new figures.
Gas was among the targets for Western sanctions on Russia after Vladimir Putin's full-scale invasion of Ukraine, which prompted countries in Europe to find other sources for the fuel. In response, Moscow sought to pivot towards new markets and boost trade ties with its allies, particularly China.
Closer trade ties with Beijing led Alexei Miller, chairman of the state gas giant Gazprom, to say in October 2023 that gas supplies to China may "reach the level that we had for export to Western Europe." But a Russian central bank report released on Tuesday showed supplies to China weren't close to making up for the shortfall caused by the exit of European buyers.
In 2023, flows from Russia to China via the Power of Siberia pipeline, which transports natural gas from Yakutia to the Primorsky territory, had increased by 7 billion cubic meters to 23 billion cubic meters, which was 1.5 times more than the previous year.
However, this only "partially compensated for their decrease from Russia through pipelines to Europe", the report said. They slumped by 38 billion cubic meters to 30 billion cubic meters.
In December, Gazprom said gas production in the first half of 2023 had tumbled by nearly a quarter to 179.45 billion cubic meters, blaming the decrease on countries' "politically motivated decisions aimed at abandoning the import of Russian gas."
Its production for the whole year of 404 billion cubic metres was around 9 percent lower than the previous year due to lower exports to Europe, Kommersant reported, according to Reuters.
Grzegorz Drozdz, a market analyst at Invest.Conotoxia.com told Newsweek: "Despite the attempt to find other customers for raw materials from Russia, we notice an overall decline in export volumes" from Russia.
"Gas imports from Russia have fallen by 65 percent since the war in Ukraine began," he said. "European countries, particularly in Western Europe, have increased their gas imports from Norway and LNG (liquefied natural gas) from the United States.
"Perhaps interestingly, the current flow of gas from Russia to Europe since the beginning of the war still exists via the Ukraine Transit pipeline, (which is) down 56 percent and Turkstream (which is) up 23 percent," he added.
Russian Deputy Prime Minister Alexander Novak has said that Europe has shown no interest in buying gas from Russia after a gas transit contract with Ukraine, which transports the fuel to Europe, expires later this year.
"We are always ready to continue gas supplies to Europe," he said, according to news agencies this week. "So far, we do not see such a desire."
Meanwhile, the Financial Times reported that construction of the Power of Siberia-2 gas pipeline to China due to start this year has been delayed, pending more economic studies, according to Mongolia, whose territory the 2,000-mile conduit will pass through.
Newsweek has contacted Gazprom for comment.
Uncommon Knowledge
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Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
About the writer
Brendan Cole is a Newsweek Senior News Reporter based in London, UK. His focus is Russia and Ukraine, in particular ... Read more
