Despite the United States continuing to ramp up sanctions on Russia’s energy industry, Russian liquefied natural gas (LNG) is still flowing into China at a discount of 20% to 30% below market prices. Data shows that since August of this year, China has received 13 vessels carrying LNG from the “Arctic LNG 2” project. Unexpectedly, the U.S. sanctions on Russian energy have made the Chinese Communist Party the biggest beneficiary.
The Nikkei Chinese website reported on the 7th that despite the U.S. pressuring Japan and Europe in mid-October to halt imports of Russian LNG, Russian LNG is instead flowing into China at significantly lower prices, around 20% to 30% below market rates.
According to vessel tracking data from the European energy investigation company Kpler, on October 30, a Russian vessel carrying natural gas from the “Arctic LNG 2” project docked at the Beihai Port in Guangxi.
The data indicates that since August of this year, China has received a total of 13 vessels carrying natural gas from this project. China is selecting ports like Beihai with less international trade traffic to minimize the risk of being sanctioned.
The “Arctic 2” project was already included in the sanction list by the Biden administration in 2023. Companies doing business with it could face secondary sanctions from the U.S., such as being cut off from financial services. Currently, the U.S. has not imposed secondary sanctions on China.
Despite the U.S. pressuring Japan and Europe in mid-October to halt imports of Russian LNG, the market has not reflected significant supply-demand tension. Looking at the spot prices for LNG in Asia, the benchmark January 2026 contract is hovering between $11.0 to $11.5 per million BTU, which is relatively low compared to the peak during the early stages of the 2022 Russia-Ukraine conflict.
The Nikkei Chinese website analysis indicates two main reasons for this phenomenon: firstly, new LNG facilities in countries like the U.S. are gradually coming online, increasing supply; secondly, even if Western countries embargo Russian gas, these energy resources will still flow into the market through China.