Russia is selling natural gas to China at a steep discount, with prices averaging $258.80 per 1,000 cubic meters in 2025, over 38% lower than the rates offered to its remaining European buyers. This price disparity highlights the challenges Moscow faces in replacing lost Western markets with Asian demand following the Russia-Ukraine war that began in 2022.
The gap is expected to narrow over time but will still hover above 27% by 2029, reflecting the less lucrative nature of China as a market despite it being Russia’s largest single gas customer. Before the invasion of Ukraine, Gazprom supplied up to 200 billion cubic meters annually to dozens of European clients. Now, pipeline deliveries to Europe are projected to drop to 32 billion cubic meters by 2028-2029, down from 36 billion in 2025 and 38 billion in 2026.
In contrast, eastbound flows to China are on the rise. The Power of Siberia pipeline hit its design capacity of 38 billion cubic meters in 2025, with actual deliveries slightly exceeding that figure. By 2029, annual shipments to China are forecasted to reach 52.5 billion cubic meters, driven by expanded agreements with China National Petroleum Corp. and potential new routes like a Far Eastern pipeline.
Gazprom CEO Alexey Miller noted last year that prices for China are lower partly due to the proximity of gas fields to Asian markets, reducing transportation costs. Still, the pricing structure underscores a strategic pivot that has yet to fully compensate for the severed commercial ties with most of Europe, where only a few countries like Hungary, Slovakia, Serbia, and Turkey continue to receive Russian pipeline gas.
Russia’s gas sales to China last year averaged $248.70 per 1,000 cubic meters, also more than 38% below European prices. With eastbound volumes set to grow, the revenue implications of this discount will remain a key factor for Gazprom’s financial outlook through the end of the decade.
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