Russia’s Gas Sales Jump 13% Thanks to Surge in China Sales, But Biden’s Sanctions Could Hit Soon

Gazprom, a Russian state-owned energy corporation, expects to exceed this year’s initial gas sales projections by a significant margin. Despite recording its first net loss last year due to strained relations with Western countries following the Ukraine conflict, the company has seen a substantial increase in sales, largely due to growing demand from China.

On Tuesday, Bloomberg reported that Gazprom Vice President Famil Sadygov announced via Telegram that the company’s gas sales are expected to reach 4.6 trillion rubles (approximately $51 billion) this year. This figure exceeds Gazprom’s earlier forecast by 155 billion rubles (about $1.7 billion).

Gazprom’s gas exports this year are estimated to be 29.7 billion cubic, an increase of more than 13% compared to last year. Notably, gas supplies to China are anticipated to exceed European exports for the first time in the company’s history. According to Bloomberg, gas supplies to China from January to November through the Power of Siberia, a Russian-Chinese natural gas pipeline, were estimated to be 28.5 billion cubic meters, surging by 40% year-on-year. Gazprom’s gas supply to Asian countries will reach 38 billion cubic meters by 2025. 

Last year, Gazprom reported a net loss of about 728.04 billion rubles (approximately $8.1 billion) for the first time since 1999 due to falling gas prices and reduced shipments to Europe following the Ukraine conflict. With Ukraine’s recent announcement to terminate gas transport contracts with Gazprom, its gas exports to Europe are expected to decrease further.

In the meantime, the U.S. plans to impose sanctions targeting Russia’s energy industry, a crucial source of revenue for the country. The Washington Post reports that the Biden administration intends to impose sanctions on Russian oil exporters and vessels transporting Russian crude oil to non-Western countries. A senior U.S. official stated that these measures are necessary to ensure Ukraine can defend itself and negotiate peace with Russia under fair terms.