Russia ramps up LNG exports to Asia despite sanctions

In June 2025, Russia's Arctic LNG 2 terminal saw the first tanker, the Iris, dock since October 2024, indicating a renewed push for liquefied natural gas (LNG) exports to Asian markets. This joint venture involving Novatek and Chinese firms CNPC, CNOOC, Mitsui, and JOGMEC provides Russia with direct access to vital Asian markets for energy resources. The geopolitical landscape remains complex, with U.S. sanctions against Russia challenging Moscow's ability to export LNG effectively. There are growing tensions following the Iran-Israel conflict that may influence Asian countries to diversify their energy imports. As LNG sales have experienced fluctuations and some recent increases, Japan and China have become key consumers of Russian gas, capitalizing on Russia's bid for increased imports while the EU seeks to reduce reliance on Russian oil and gas by 2027. The JKM benchmark price for LNG deliveries to Northeast Asia reached $12.86/MMBtu during the Iris's docking period, indicative of high demand in the market. These circumstances amplify the competitive landscape for Russian LNG as OPEC+ deliberates oil production amidst volatile pricing dynamics. The persistent sanctions targeting Russia's energy sector remain a challenge; however, Moscow is exploring alternative routes and leveraging the seasonal opening of the Northern Sea Route. The prospect of increasing LNG shipments via this corridor could be a strategic opportunity for Russia in light of fluctuating Middle Eastern oil supplies. Moreover, the development of infrastructure to support gas exports to Central Asia and India remains complicated, introducing added risk for Russia. While sanctions have prompted shifts in trade dynamics, the willingness of companies like Mitsui OSK Lines to disregard these restrictions suggests that there may still be avenues for Russian LNG to reach its markets. Although significant caution exists within the Asian energy market, which consumed over 80% of crude oil and LNG transported through the Strait of Hormuz, heightened demand for Russian LNG may ensue as buyers seek to de-risk their energy portfolios post the Iran-Israel conflict.