Russian gas output fell 3.2% in H1 2025 as China volumes failed to plug the European hole

Russian gas output fell 3.2% in H1 2025 as China volumes failed to plug the European hole Moscow's pivot east is running near pipeline capacity while Power of Siberia 2 stays stuck on price, leaving TTF without a clear new catalyst. Russia's natural gas production fell 3.2% in the first half of 2025 to 334.8 billion cubic metres, federal statistics showed, as higher exports to China and stronger domestic demand failed to cover the loss of pipeline flows to Europe, Bloomberg reported on Wednesday (2026-05-20).^2,1 That matters for European gas because it confirms the ceiling on Moscow's eastern escape route. China, now Russia's top gas customer, has lifted intake through the Power of Siberia pipeline by more than 20% this year, occasionally above contractual minimums, but that line is running toward its 38 bcm annual maximum.^2,1 When a pipeline is near full, extra Chinese demand cannot rescue Russian output.¹ The volumes do not net out. The flows Russia lost to Europe were several times what Power of Siberia can carry, which is why a 20%-plus jump east still leaves total production down. LNG offered no offset either, with Russian output falling 5.1% to about 16.5 million tonnes over the period, federal data showed.¹ For an ICE Endex TTF front-month trader the read is muted rather than directional. The signal ledger shows 22 signals splitting mixed, with bearish weight modestly ahead of bullish and an overall strength of just 14%.^2,1 That is a market without conviction. Russia's eastern pivot is a slow drain on the gas that once flowed west, not a fresh shock that moves the front of the curve.¹ The longer story sits with Power of Siberia 2, the proposed 50 bcm-a-year line through Mongolia that has been stalled for years.³ Vladimir Putin arrived in Beijing on Wednesday (2026-05-20) to meet Xi Jinping with the pipeline back on the agenda.⁴ A deal would, over time, give Moscow a second large outlet east and harden the loss of Europe as a customer.³ But price is the wall. China reportedly wants terms near Russia's domestic rate of around $120-130 per 1,000 cubic metres, while Moscow is pushing for something closer to Power of Siberia 1.⁴ That gap has kept the project on paper for most of a decade, and the Beijing meeting did not, on the packet's evidence, close it. Until concrete is poured, Power of Siberia 2 changes nothing for European supply balances or for TTF.^4,3 There is a harder edge to the pivot that traders should not miss. The more Russia leans on China to absorb the gas Europe no longer buys, the less leverage it holds over pricing, since China is now its top customer and negotiating from strength.^2,4 A single dominant buyer setting terms near its own domestic rate is not the windfall Moscow wanted from Asia.⁴ None of this hands TTF a trade this week (2026-06-03). The European balance is shaped far more by storage, weather and LNG arbitrage than by a Russian production line already written out of the western supply stack. The Russia-China axis matters for where the gas goes over years, not for the front-month over days.^1,3 What to watch is whether the Beijing talks produce anything firmer than another communiqué. A signed Power of Siberia 2 framework, or a credible move on the $120-130 versus Power of Siberia 1 pricing dispute, would be the first concrete sign that Russia's eastern lifeline is becoming permanent infrastructure rather than a negotiating prop. Until then, the China route stays near capacity, Russian output keeps slipping, and TTF takes its cues from elsewhere.^4,3¹