Russia Attempts to Bypass Sanctions by Secretly Selling LNG to South Asia at Discounts

In light of ongoing international sanctions, Russia is taking measures to secretly sell its liquefied natural gas (LNG) to South Asia, offering significant discounts on its products. According to information released by Bloomberg, lesser-known intermediary companies from Russia and China are actively proposing to energy-deficient countries in Asia to purchase Russian LNG at discounts of up to 40% off spot prices. This activity was first recorded in early April, citing anonymous sources who provided this information.

Sellers claim they can provide documents that create the appearance of gas supplies from non-Russian sources, such as Oman or Nigeria. However, Bloomberg was unable to confirm any actual agreements regarding the purchase of any of these shipments, highlighting the complexity of the market situation.

It is important to note that the effective closure of the Strait of Hormuz, as well as attacks on the world's largest LNG export facility in Qatar, have led to a reduction of approximately one-fifth of global gas supplies. This has significantly impacted the gas market, driving up energy prices. Supplies from Qatar have completely ceased, forcing consumers in countries like Bangladesh and India to seek more expensive alternatives to meet their gas needs.

Specifically, Bangladesh, which received 60% of its LNG from Qatar in 2025, is now compelled to purchase gas on the spot market, sometimes at prices that are double those of long-term contracts. This creates an additional burden for the country's economy, which is striving to ensure energy stability.

India, which has traditionally avoided importing oil and gas that are subject to sanctions, has also stated that it will not accept Russian LNG produced by companies that are blacklisted. This indicates that, despite Russia's efforts, most buyers remain cautious in their decisions, fearing potential repercussions from Washington.

Bloomberg notes that despite Russia continuing to ramp up exports from its sanctioned facilities, such as Arctic LNG-2 and Portovaya, most buyers are still wary of accepting shipments that are limited by sanctions. The only country that continues to import sanctioned Russian LNG is China, which is utilizing a network of shadow fleets to secure supplies.

The expansion of supplies to countries outside of China has helped Russia diversify its customer base and increase exports from sanctioned facilities. Arctic LNG-2, which was set to become Russia's largest LNG producer, plans to begin exports in 2024, but its full loading is limited by a lack of transport capacity and buyers.

It is worth noting that earlier sources from Reuters reported that India is ready to resume imports of Russian LNG amid events in the Middle East, which may indicate a shift in the country's policy regarding energy supplies. This could have serious implications for the global gas market, considering that India is one of the largest energy consumers in the region.