Russia's gas pivot stalls as the EU keeps paying €2.9bn a quarter for LNG

Russia's gas pivot stalls as the EU keeps paying €2.9bn a quarter for LNG Europe still funds Russia's flagship Arctic LNG even as Gazprom's pipeline business collapses and Moscow's planned switch to China remains unbuilt. A proposed energy initiative seen costing some $10 billion is being floated as protection for exporters against the financial fallout of other countries' geopolitical decisions, a cost its backers reckon well spent.⁵ No energy exporter has more reason to want that insulation than Russia. Its European business has been gutted by exactly the kind of geopolitical decision such a scheme is meant to cushion. Russian gas now makes up just 18% of European imports, down from 45% in 2021, while Russian oil has dropped to 3% of the bloc's imports from around 30% over the same period.² Yet the cash has not stopped. EU countries paid Russia €2.9bn for around 5.1m tonnes, or 6.9 bcm, of LNG in the first quarter, up from 4.3m tonnes a year earlier, environmental group Urgewald said on Friday (2026-05-15).¹ Almost all of it came from one place. Some 97% of Yamal Arctic LNG deliveries in the first quarter of 2026 went to the EU, the group said, which called the sum a windfall for the Kremlin and described Europe as the indispensable market for Russia's flagship Arctic project.¹ The pipeline side tells the opposite story. Gazprom posted losses of almost $7 billion in 2023, its first annual loss since 1999, after the rupture with the EU stripped away its main source of export revenue.² Russia's economy ministry now expects pipeline gas exports outside the former Soviet Union to drop 10.7% this year to 72 bcm, and sees LNG exports edging up just 3% to 35.7m tonnes, still below earlier forecasts.² The money is leaning harder on oil. The ministry lifted its 2025 oil-and-gas export revenue estimate to $206.1 billion from $200.3 billion, with oil exports now pencilled at 240.1m tonnes against 229.7m before.² Moscow's planned pivot to Asia has not closed the gap. Power of Siberia 2, the pipeline that would carry 50 bcm a year to China through Mongolia, remains unbuilt and its commercial terms unresolved.³ The Kremlin is keen to expand sales to China, which will need more gas to replace a gradual phasing-out of coal, said Vita Spivak, an energy analyst at Control Risks.³ Until that line opens, the volumes once bound for Europe have nowhere to go.³ Europe's own exit is unfinished. The contract governing Russian gas transit through Ukraine ended on 1 January 2025, with consequences for the pipeline flows still reaching some EU members.⁴ For now the LNG money keeps moving. The €2.9bn booked in the first quarter is the cleanest measure of how hard that dependence will be to break, and whether Moscow can lay enough pipe to China before its European revenue thins is the question hanging over its own ministry's forecasts.^1,3