Russia is capitalizing on a global natural gas supply shortage by offering shipments from its US-sanctioned facilities to energy-hungry South Asian nations at a staggering 40% discount to spot prices. The move targets countries like India and Bangladesh, which are grappling with severe supply disruptions following the closure of the Strait of Hormuz and attacks on Qatar’s largest LNG export plant.
The discounted shipments, facilitated through obscure intermediary companies based in China and Russia, come with paperwork designed to obscure their origins, presenting the gas as sourced from countries like Oman or Nigeria. While it remains unclear if any deals have been finalized, the steep price cuts reflect Moscow’s aggressive push to expand its customer base beyond China, the only nation currently importing sanctioned Russian LNG via shadow fleet vessels.
South Asia’s energy crisis has intensified due to the throttling of about a fifth of global LNG supply. Bangladesh, which relied on Qatar for 60% of its LNG last year, now faces spot market purchases at nearly double the cost of its long-term contracts. Both Bangladesh and India have had to ration gas supplies to critical sectors like fertilizers, amplifying the urgency for affordable alternatives.
Russia’s sanctioned export plants, including Arctic LNG 2 and Portovaya, are central to this strategy. Arctic LNG 2, intended to be Russia’s largest LNG facility, began exports in 2024 but operates below capacity due to limited shipping options and hesitant buyers wary of US retaliation. Diversifying to South Asian markets could unlock significant export growth for Moscow.
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India, however, maintains a cautious stance on sanctioned energy imports. Despite recently purchasing Iranian oil under a US Treasury waiver, New Delhi has publicly rejected LNG from blacklisted Russian projects. This hesitation contrasts with China’s willingness to engage, highlighting the geopolitical tightrope South Asian nations must navigate amid soaring energy costs.
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