Asia vs. Europe: Russian LNG turns into the gas of "last hope"
Due to the escalation of the conflict in the Middle East, gas prices in Europe have risen by another third. At the same time, there was a shortage in Asia — up to 90% of all Middle Eastern supplies went there. Russia is able to partially replace LNG from the Persian Gulf for Asians. Russia plans to redirect gas to Asia, even without waiting for a complete European ban on Russian raw materials. However, there are objective obstacles. One of the key issues is the shortage of ice—class tankers. Izvestia found out whether there are solutions to the problem and what are the prospects for a real expansion of LNG exports from Russia to Asian markets.
Price shock
The conflict in the Middle East continues unabated, and the LNG plants of Qatar, the world's third largest supplier of liquefied natural gas, have been hit by missile attacks. For Europe, this resulted in another price shock. Gas on the London stock Exchange reacted with a jump — prices soared by a third, exceeding $ 850 per thousand cubic meters.
At the same time, the supply of Qatari LNG is not too critical for Europe: even in peak volumes, its market share does not exceed 15%.
— In the first 10 months of 2025, EU countries imported a total of 5.8 million tons of LNG from Qatar in the first 10 months of 2025, which is only 10.5% of the total LNG demand. For comparison, LNG imports from the United States over the same period reached 29.5 million tons (53.7% of total demand), from Russia — 6.8 million tons (12.5% of total demand), — says Sergey Ermilov, Manager of the Reksoft Consulting Strategy Practice.
Obviously, it will not be difficult for the EU to fill the dropped volumes. The question is at what price.
— Middle Eastern exports have a critical impact on the price formation process. The cost of swap supplies, "overclocked" by the Asian premium (Qatar supplies about 90% of all LNG used in the Asia—Pacific countries), differs by 60-70% from the usual for Europeans, explains Pavel Maryshev, a member of the expert council at the Russian Gas Society.
We've miscalculated somewhere.
The situation is really difficult. The United States is the key supplier of LNG to the Old World; up to 80% of American exports go there. The Americans certainly will not sell LNG to Europe at a "politically motivated discount."
An aggravating factor for Europe is the abnormally low gas reserves in underground storage facilities (UGS): as of March 19, the UGS occupancy rate was 28%. There is a hot summer ahead, and reserves have not been formed for the summer period. Filling them at peak prices will be all the more difficult.
Meanwhile, Europe's plan for Russian gas remains the same — complete withdrawal by the end of 2026. In addition, starting from April 25, they want to ban swap LNG supplies from Russia to the EU. Meanwhile, in anticipation of new restrictions, the EU countries are promptly purchasing extra volumes in Russia.
— One of the options for a "gray" solution to the issue may be to reduce attention to the country of origin of LNG. In this case, Russian gas will continue to enter the European market through third countries. However, it is important to understand that Russian LNG occupies only 17% of the EU market," Maryshev points out.
"Economic shock"
Asia is in even more dire straits. It is 90% dependent on the Middle East LNG supplies. In particular, China is highly dependent, but its sources are quite diversified. It is much harder for the countries of South Asia, where the conflict over Iran has already provoked an acute shortage of liquefied natural gas, gasoline and diesel.
Pakistan (99%), India (68%) and Bangladesh (57%) are particularly dependent on exports from Qatar, Oman and the UAE. Given the approach of the hot season (April – June), characterized by increased electricity consumption and, consequently, demand for LNG, says Ermilov.
These countries are already introducing emergency measures. In India, Bangladesh, Sri Lanka, and Pakistan, they are switching to coal, firewood, and kerosene, catering and schools are closing, government agencies are switching to a four-day working week, and there are huge queues at gas stations.
An economic shock has begun in South Asian countries due to a reduction in fuel supplies, the Financial Times states.
According to Ermilov's estimates, even if there are no other attacks on plants in Qatar and the UAE, the market will miss about 13 million tons of LNG after the opening of the Strait of Hormuz.
Help the Asians
Russia has promised to redirect part of the LNG to Asia, without waiting for European import bans.
Part of the Russian LNG will be redirected from Europe to friendly countries that are ready to conclude long-term contracts, said Deputy Prime Minister Alexander Novak. According to him, deliveries will begin in the near future.
Nevertheless, there is still no talk of a complete replacement of the lost volumes from the Persian Gulf.
"Even if the total capacity of Russian LNG plants (42.4 million tons/year) is supplemented by the ability of Arctic facilities to operate beyond their design capacity, the result (46-47 million tons) is almost twice as low as the total LNG exports from Qatar and the United Arab Emirates — 86.1 million tons in 2025," says Ermilov.
In addition, further expansion of supplies to Asian markets is hampered by a number of restrictions. Firstly, most of the LNG supplies from Russia are under long-term contracts. Secondly, a number of large LNG production and processing projects are under sanctions.
Shortage of tankers
Finally, one of the key problems is the shortage of ice—type tankers.
Redirecting flows quickly may not be easy: Yamal LNG's main export project depends on specialized Arctic Arc7 tankers, which are designed for short routes to European ports, and the infrastructure for transshipment to conventional vessels for long voyages to Asia is limited, Urgewald pointed out in January based on Kpler data.
Deliveries from Yamal are carried out through a long transport shoulder, which leads to a significant increase in the cost of supplies. Supplies from Arctic LNG-2 are limited here by the navigation window from July to October and the absence of ice-type tankers.
— The only two ice—class gas carriers owned by Sovcomflot are the Christophe de Margerie and Alexey Kosygin (the first was built at the Korean Hanwha Ocean shipyard, the second at the Russian Zvezda). The Konstantin Posyet entered sea trials in March 2026, and two more icebreaker gas carriers, the Pyotr Stolypin and the Sergei Witte, are in high readiness," Ermilov said.
It is possible that in the event of further escalation in the Middle East, it will be possible to bargain for several LNG vessels from South Korea, Maryshev adds.
Restructuring of logistics and freight
Experts believe that part of the problem could be solved by well-thought-out logistics, allowing icebreaker tankers to operate on a limited section of the route.
— The Koryak floating gas storage Facility (UGS), moored in the Bechevinskaya Bay of the Kamchatka Territory, allows for intermediate LNG transshipment. In this regard, conventional gas tankers may already be operating on the further route to China and potentially other Asian countries," explains Ermilov.
— The alternative may be the transshipment of LNG in the Murmansk port, followed by the movement of supplies through a long logistics arm. In this case, a lower-class LNG tanker can deliver gas under certain navigation conditions," adds Maryshev.
Analysts consider providing importers with the opportunity to independently charter ships for supplies to be another option. The threat of secondary sanctions for buyers is still hindering here. If they are weakened, it will be possible to purchase raw materials from Arctic LNG-2 at a large discount.
Nevertheless, according to experts, the EU's planned withdrawal from purchases of Russian LNG by the end of 2026 will already make it possible to redirect a fairly significant amount to Asian markets.
If Europe abandons Russian LNG at the end of April, 15 million tons will be released, for which there are ice—class tankers. They are already servicing this project and will be redirected to the east, says Maryshev. In the medium term, Ust-Luga (currently under sanctions) and Murmansk LNG will be completed. According to the analyst, this will allow an additional supply of about 25 million tons of LNG to world markets.
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