US tariffs are changing the mindset: oil and gas from Russia become "native" to China

Alexey Belogoryev, Director of Research and Development at the Institute of Energy and Finance, commented to Oil and Capital on the prospects for increasing Russian gas exports to China in terms of the US trade wars.

Alexey Belogoryev explained that China is probably testing the ground in this way. The interview with the Chinese ambassador is a fairly straightforward signal from Beijing that it is ready to step up negotiations on the Power of Siberia 2 and show a real greater interest in Russian LNG supplies. In the context of the trade war with the United States, which will drag on for a long time, China will become more cautious about buying energy resources from the United States. Nevertheless, the share of LNG in China's imports is at least 10%.

"Given the overall balance of supply in the market, Russia is one of the most attractive LNG suppliers. But everything is complicated by the sanctions imposed by the United States, to which Chinese companies pay great attention. As long as there are restrictions, there will be no increase in supplies from Russia, as well as the conclusion of long-term LNG contracts. If they are removed, then everything will change.

I wouldn't get my hopes up too much because of Power of Siberia 2. Its pumping volume of 50 billion cubic meters per year does not fit well into China's balance sheet in the 2030s. But if you subtract all LNG from the USA from China's imports, then the Power of Siberia 2 will become relevant, but not at full capacity, but by about 20-30 billion cubic meters plus a small reserve. By the way, China will no longer buy LNG from the United States under long-term contracts, but only on the spot market," Alexey Belogoryev shared his opinion.