Russia to divert liquefied gas from Europe to Asia

Russian energy companies will soon divert part of their liquefied gas supplies from Europe to Asia with the blessing of President Vladimir Putin, a senior government official said in Moscow on Friday.

The companies did not want to wait to be saddled with further sanctions from Brussels and are turning their attention to the East, said Alexander Novak, deputy prime minister responsible for energy issues.

Novak named India, Thailand, the Philippines and China as possible partners for long-term contracts.

Gas prices have risen significantly in recent days due to the war in Iran.

With shipping traffic in the Persian Gulf restricted by the crisis and the future of oil and gas production in the region currently uncertain, global markets reacted with sharp price swings for raw materials.

Against this backdrop, Russian President Vladimir Putin already hinted at a possible pivot to the East in an interview with state television on Thursday.

Since new markets are now opening up, it might be better to stop deliveries to Europe immediately, according to the Russian head of state.

At Putin’s instruction, the government had decided in talks with companies that part of the volume of liquefied gas that currently goes to Europe and European markets will be redirected to other markets, Novak said.

These are markets where there is now demand “and where constructive, pragmatic relations with us are being established.”

Relations between Russia and the European Union are severely strained due to the war in Ukraine, which Putin began in 2022 with a full-scale invasion. The EU imposed sanctions on Russia in response.

Gas supplies have fallen sharply, but Europe still imported liquefied natural gas worth €7.4 billion ($8.58 billion) from Russia last year.