Russia offers sanctioned LNG to energy-hungry Asia at a 40% discount

Russia is seeking to leverage a global natural gas supply crunch to lure energy-starved South Asia into purchasing shipments from its US-sanctioned facilities, according to people familiar with the matter.

The shipments were being offered at a 40% discount to spot prices last week via little-known intermediary companies based in China and Russia, said the people, who asked not to be named, as they aren’t authorised to speak with the media. The sellers said that they could provide paperwork to make it appear that the shipments originated from non-Russian sources, like Oman or Nigeria, the people said.

Bloomberg News wasn’t able to confirm whether any of the shipments were purchased.

The effective closure of the Strait of Hormuz – and attacks on the world’s largest LNG export plant in Qatar – has throttled about a fifth of global supply, upending the gas market and lifting prices. Shipments from Qatar have come to a standstill, forcing customers in Bangladesh and India to look for more expensive alternatives.

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Bangladesh, which received 60% of its LNG from Qatar last year, has resorted to buying shipments from the spot market, at times spending roughly double what it would have under its long-term contracts with the Middle Eastern nation. Bangladesh and India have also been forced to curb gas supply to the fertiliser sector due to the reduction in LNG deliveries.

India typically takes a conservative approach to importing sanctioned oil and gas, and its government has previously said that it won’t take Russian LNG from blacklisted projects. India bought its first Iranian oil shipment since 2019 following a US Treasury general licence issued last month that waived restrictions.

While Russia has been steadily expanding exports from its US-sanctioned export plants — Arctic LNG 2 and Portovaya — most buyers remain wary of taking restricted shipments out of fear of retaliation from Washington. China has so far been the only country to import the sanctioned Russian LNG via a network of shadow fleet vessels.

Expanding deliveries to countries outside of China would help Russia diversify its customer base and expand exports from its blacklisted facilities. Arctic LNG 2 — which was designed to be the largest Russian LNG plant — began exports in 2024, but its full capacity has been throttled by a lack of shipping capacity and willing buyers.