EU Sanctions Crush LNG Prices in Russia.

Price Drop for LNG in Russia Due to Export Restrictions to the EU

EU sanctions have led to a decrease in liquefied natural gas (LNG) prices in Russia. This occurred due to export restrictions to European Union countries, resulting in a surplus of fuel material on the domestic market.

On December 20, following Poland's proposal, sanctions on Russian LNG by the EU came into effect.

Liquefied natural gas, used as fuel for vehicles, heating, and petrochemical product manufacturing, has significantly decreased in price in Russia. The price dropped from 28,000 rubles per ton in November to 14,000 rubles (140 dollars) in December.

LNG export is profitable for Russia as supplies to Poland yield up to 230 dollars per ton. However, now only certain types of Russian LNG can be exported, which constitute only a small portion of the total LNG export volume.

However, some types of Russian LNG can still be exported, but they represent only a small portion of the total LNG export volume that Russia previously had.

In recent months, Russia has increased LNG exports to China, Mongolia, Armenia, Georgia, and Azerbaijan. Exports to China have potential for further growth.

Russia also supplies LNG to Afghanistan, but there are reports of payment issues. Afghan partners are willing to pay only in cash, leading to difficulties in returning this cash to Russia.