popular articles

Russia reinvents its energy future with Asia and Arctic LNG2

Russia is massively redirecting its oil exports to Asia and making progress on the Arctic LNG 2 project, despite Western sanctions.

Please share:

Faced with an increasingly restrictive international environment, Russia has made a major strategic pivot by redirecting almost all its oil exports to Asia, mainly China and India. This maneuver, orchestrated in response to Western sanctions, preserved the country’s oil revenues. However, it is important to note that, following the implementation of a price cap by the international coalition, including the G7, the European Union and Australia, the Russian oil revenues fell by a significant 32% between January and November 2023compared with the same period in 2022. This measure aims to limit the financing of the war in Ukraine.

Impact of Sanctions and Strategic Responses

The Western sanctions, imposed because of Russia’s offensive in Ukraine, were aimed at hitting Russia’s energy sector, a vital component of its economy. In response, Russia has reacted with agility, redefining its commercial partnerships and turning to less traditional markets. However, the coalition has tightened the rules surrounding price caps, setting a maximum price of $60 a barrel for Russian oil sold to member countries. These measures have a significant impact on the global oil market and the Russian economy, aiming to maintain the stability of energy markets while reducing Russian revenues.

The Arctic LNG 2 Project: Defying Sanctions

The Arctic LNG 2 project, a gas megaproject in the Russian Arctic, is a striking example of Russia’s resilience and economic ambition in the face of sanctions. Despite the challenges posed by US sanctions, the project, led by gas giant Novatek, is making good progress. The commissioning of the first phase of the project is an important milestone, marking the start of a new era for the Russian gas industry. This major project is designed not only to significantly increase Russia’s production of liquefied natural gas (LNG), but also to strengthen its position in the global LNG market, diversifying its sources of revenue and accessing new markets.

Future Prospects and Ambitions for Gas

Russia’s long-term vision for its energy sector is ambitious. Spearheaded by the Arctic LNG 2 project, Russia plans to increase its share of global LNG production from 8% to 15-20% by 2035. This significant expansion reflects Russia’s ambition to become a major player in the global LNG market. The implications of this growth are considerable, not only for the Russian economy but also for the global energy market. By increasing its production capacity and diversifying its markets, Russia is seeking to ensure long-term stability and economic growth, despite an uncertain geopolitical context.

By redirecting its oil exports to Asia and pushing ahead with the Arctic LNG 2 project, Russia is demonstrating a remarkable ability to navigate a complex geopolitical environment and adapt to economic challenges. These strategic initiatives are not only responses to Western sanctions, but also steps towards a broader reconfiguration of global energy geopolitics. By proactively positioning itself in new markets and developing large-scale projects, Russia is actively shaping its economic and energy future.

Register free of charge for uninterrupted access.

Publicite

Recently published in

Putin proposes mediator role between Washington and Tehran over Iran’s nuclear issue

The Kremlin has confirmed that Vladimir Putin aims to help resolve the nuclear dispute between the United States and Iran, leveraging strengthened strategic ties with Tehran.
President Lee Jae-myung adopts an energy diplomacy rooted in national interest, amid a complex international landscape of rivalries that could create challenging situations for the country and its energy businesses.
President Lee Jae-myung adopts an energy diplomacy rooted in national interest, amid a complex international landscape of rivalries that could create challenging situations for the country and its energy businesses.
Paris and Warsaw held a bilateral workshop in Warsaw to strengthen coordination on electricity infrastructure investments and supply security under the Nancy Treaty.
Paris and Warsaw held a bilateral workshop in Warsaw to strengthen coordination on electricity infrastructure investments and supply security under the Nancy Treaty.
Donald Trump firmly rejects any uranium enrichment by Iran, while Russia affirms Tehran’s right to civil nuclear power, intensifying tensions in negotiations over the Iranian nuclear program.
Donald Trump firmly rejects any uranium enrichment by Iran, while Russia affirms Tehran’s right to civil nuclear power, intensifying tensions in negotiations over the Iranian nuclear program.

Syria signs $7bn energy deal with foreign partners

Syria has signed a $7bn agreement with a consortium of companies from Qatar, Turkey and the United States to rebuild its national power sector.
Friedrich Merz confirmed that Germany would block any attempt to relaunch the Nord Stream 2 pipeline, despite internal calls suggesting a potential reopening of dialogue with Moscow.
Friedrich Merz confirmed that Germany would block any attempt to relaunch the Nord Stream 2 pipeline, despite internal calls suggesting a potential reopening of dialogue with Moscow.
A memorandum of understanding formalises energy cooperation between the European Union and the Latin American Energy Organization, including permanent EU participation in the organisation’s governance bodies.
A memorandum of understanding formalises energy cooperation between the European Union and the Latin American Energy Organization, including permanent EU participation in the organisation’s governance bodies.
Prime Minister Viktor Orban announced that Hungary would oppose the EU's plan to ban Russian energy deliveries by 2027, both legally and politically.
Prime Minister Viktor Orban announced that Hungary would oppose the EU's plan to ban Russian energy deliveries by 2027, both legally and politically.

A German conservative leader calls for reopening the Nord Stream 2 file

Michael Kretschmer, Minister-President of Saxony, proposed restarting dialogue with Russia on the Nord Stream 2 pipeline, despite clear opposition from the German government to any reactivation of the project.
Donald Trump is calling on the United Kingdom to abandon wind energy in favor of revitalizing offshore oil extraction, sparking debate over the economic and political implications of such an energy strategy after their recent trade agreement.
Donald Trump is calling on the United Kingdom to abandon wind energy in favor of revitalizing offshore oil extraction, sparking debate over the economic and political implications of such an energy strategy after their recent trade agreement.
China and Egypt concluded over 30 energy-focused agreements, including electric vehicles, smart grids and storage technologies.
China and Egypt concluded over 30 energy-focused agreements, including electric vehicles, smart grids and storage technologies.
Facing Russian dominance in the Akkuyu nuclear project, Turkey accelerates international negotiations, aiming to mitigate risks related to energy dependency and potential strategic conflicts of interest.
Facing Russian dominance in the Akkuyu nuclear project, Turkey accelerates international negotiations, aiming to mitigate risks related to energy dependency and potential strategic conflicts of interest.

European Union sanctions 189 new Russian tankers used clandestinely

The European Union has expanded its measures against Russia by targeting nearly 200 new vessels illegally transporting oil, as part of its 17th sanctions package.
Faced with domestic industrial overcapacity, China is stepping up its international renewable energy investments, aiming to dominate global value chains while opening new markets for its companies.
Faced with domestic industrial overcapacity, China is stepping up its international renewable energy investments, aiming to dominate global value chains while opening new markets for its companies.
Brussels aims to persuade the G7 to reduce the Russian oil price cap to $50 per barrel, as part of negotiations on the next sanctions package targeting Moscow’s energy revenues.
Brussels aims to persuade the G7 to reduce the Russian oil price cap to $50 per barrel, as part of negotiations on the next sanctions package targeting Moscow’s energy revenues.
After three years of separation post-Brexit, the United Kingdom and the European Union have announced their intention to examine conditions for the UK's reintegration into the European electricity market, aiming to optimize cross-border exchanges.
After three years of separation post-Brexit, the United Kingdom and the European Union have announced their intention to examine conditions for the UK's reintegration into the European electricity market, aiming to optimize cross-border exchanges.

Morocco and the UAE seal a strategic agreement on energy and water

A structural partnership includes HVDC lines, natural gas power plants and desalination facilities, financed by a consortium including TAQA and Nareva.
The BRICS denounce economic sanctions and trade restrictions imposed by Western countries, warning of their consequences on global energy markets, especially regarding supply chains and financial stability in the energy sector.
The BRICS denounce economic sanctions and trade restrictions imposed by Western countries, warning of their consequences on global energy markets, especially regarding supply chains and financial stability in the energy sector.
In Kenya, China is consolidating its dominant position in the energy sector through massive exports of clean technologies and major infrastructure contracts, as Nairobi accelerates its energy and industrial targets for 2030.
In Kenya, China is consolidating its dominant position in the energy sector through massive exports of clean technologies and major infrastructure contracts, as Nairobi accelerates its energy and industrial targets for 2030.
Iranian officials met in Istanbul with the European trio to discuss the nuclear programme, as Washington threatens new sanctions in case of deadlock.
Iranian officials met in Istanbul with the European trio to discuss the nuclear programme, as Washington threatens new sanctions in case of deadlock.

Chinese energy investments: new models and challenges in Africa

Faced with the heavy debts of emerging countries, China is shifting its strategy in Africa, reducing massive loans in favour of targeted commercial investments as Western competition intensifies around clean energy technologies.
Dan Jørgensen, European Commissioner for Energy, confirms that the EU will continue its ban on Russian gas imports, regardless of the outcome of peace negotiations in Ukraine, with legislative proposals expected in June.
Dan Jørgensen, European Commissioner for Energy, confirms that the EU will continue its ban on Russian gas imports, regardless of the outcome of peace negotiations in Ukraine, with legislative proposals expected in June.
On May 13, energy ministers from Baltic Sea countries signed a new memorandum of understanding to reinforce interconnections and energy security amid growing geopolitical tensions.
On May 13, energy ministers from Baltic Sea countries signed a new memorandum of understanding to reinforce interconnections and energy security amid growing geopolitical tensions.
Belgrade aims to retain favourable pricing terms for Russian gas imports as the current contract nears its May 31 deadline.
Belgrade aims to retain favourable pricing terms for Russian gas imports as the current contract nears its May 31 deadline.

Advertising