Russia Offers Sanctioned LNG at 40% Discount as Supply Crunch Hits Asia

Supply Disruptions in the global LNG market have constrained availability across regions, as per The Bloomberg Report. The effective closure of the Strait of Hormuz, alongside attacks on Qatar’s largest export facility, has removed close to 20% of global supply.  

Qatar shipments have stalled, forcing import-dependent countries to seek alternatives in an already strained market. 

Higher Spot Purchases in South Asia 

India and Bangladesh have turned to the spot market to secure cargoes. Bangladesh, which sourced around 60% of its LNG from Qatar last year, has been buying at significantly higher prices, at times paying nearly twice its contracted rates.  

Reduced availability has also led both countries to cut gas supply to the fertiliser sector. 

Discounted Russian Cargoes Offered 

Amid this backdrop, Russia has offered LNG from US-sanctioned projects at discounted rates. Cargoes were marketed at around 40% below spot prices through intermediary firms based in China and Russia.  

Sellers indicated that documentation could be arranged to present the cargoes as originating from other countries, including Oman or Nigeria. There is no confirmation that any transactions have been completed. 

Limited Buyer Participation 

Most buyers have remained cautious due to sanctions risks. While there has been some flexibility in crude imports under specific waivers, LNG procurement remains more constrained. 

Exports from Sanctioned Projects Continue 

Russia has continued exports from facilities such as Arctic LNG 2 and Portovaya. Arctic LNG 2, which began shipments in 2024, has faced constraints due to limited shipping capacity and a restricted pool of buyers.  

China has so far been the primary importer of sanctioned Russian LNG, often using alternative shipping arrangements. 

Read More: RBI Will Monitor Forex Markets for Sharp Volatility, Says Governor Sanjay Malhotra! 

Conclusion 

Discounted Russian LNG has entered the market during a period of supply shortage, but uptake remains uncertain due to regulatory and geopolitical constraints. 

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